High-horses are all very well but not if you want to get somewhere

Bard is available in 180 countries and territories, including the UK, but not the EU. Is this a new Digital Divide? One wonders what effect this will have on investment in AI across the EU? Other AI services are also not releasing. The lack of debate around the consequences of this is astounding. 

When Italy declared UDI and banned ChatGPT they quickly relented (actually a move by right wingers to show their strength). But this is different, large AI providers, such as Google and Facebook, are taking the initiative and simply not releasing AI services in EU countries. This new Digital Divide may soon be between the EU and the rest of the world and could have serious consequences.

 

On the other hand, the EU is a huge and wealthy market, so the large tech companies will not take these decisions lightly. The problem is that its legislation is often bureaucratic and cumbersome, involving lots of paperwork and hits on productivity. The famous pop-up consent solution ‘Manage all cookies’ GDPR nonsense (no one reads the consent forms, therefore largely a waste of time) )was the result of bad legislation, producing a massive hit on productivity with no tangible benefits.

 

Economic environment

Let’s start with the big picture. “In 2008 the EU economy was somewhat larger than America’s. In 2008 the EU’s economy was nearly 10% larger than America’s at $16.2tn versus $14.7tn, by 2022, the US economy had grown to $25tn, whereas the EU and the UK together had only reached $19.8tn… Now the US is nearly one-third bigger. It is more than 50 per cent larger than the EU without the UK…” (FT 20 June 2023) and that gap is growing. The US has trounced Europe in terms of productivity, economic growth, investment models, research, investment, the creation of tech companies, defence and energy policy. It has also trounced the EU in terms of AI research and implementation.

 

Productivity deficit

All of the above matters as ‘productivity’ needs a well-educated and skilled workforce, good infrastructure, and a favourable business and investment environment. Importantly, those with the more sophisticated tools tend to be the more productive. If the EU either ban such tools or create an environment where angels fear to tread, then productivity on coding, management and general output, as these tools affect almost every sector, will fall behind. We had a dry run when Italy banned ChatGPT there were reports of falls in productivity.

 

Training and education deficit

The University research and teaching system that feeds AI tech in terms of research and skilled labour is dominated by the US, UK and China. EU Universities barely figure in the rankings. An additional problem is the now deeply rooted anti-corporate sentiment in Higher Education in both the UK and EU. The sneering attitude towards the private sector, even OpenAI as a not-for profit, is now the norm.

 

Effort in AI is skewed towards ethics making the atmosphere negative and progress slow. This is a great danger that the benefits will be realised elsewhere while we remain rooted in our Medieval institituions seeing everything as a moral problem. There is noithing wrong with the moral debate but it is so often driven by fearmongering and acticism, with little actual moral or ethical foundation, which is to look at the moral issues and consequences, good and bad.

 

An additional problem is the unlikely adoption of AI in education. The real initiatives such as Khan Academy and Duolingo have been funded and implemented in the US, aided by philanthropic investment. There is little of that energy in Europe. As AI become integrated into education and training in the US, its absence here will mean less productivity in learning. 

 

Investment freeze

Investors looked askance at Italy’s surprise ban, and widened their gaze across the whole of the EU. If one country can do this, so can others. Investors have a currency – it is called ‘risk’. They assess and quantify risks. One of those risks is already the Italy ban, huge fines are another, the general rhetoric and cultural context is yet another. Why would large scale investments flow into a territory where bans, fines and an absence of services have become the norm? Investors like a favourable business environment not one that is based on punishment.

 

Investment model

The model that emerged post-war in the US has proved superior to that in Europe – private sector, investors, government  and Universities working together on large projects with a real focus on impact. In AI we now see the fruits of that system in the US, where ground-breaking research on foundation models takes place in large tech companies and not-for-profits, such as OpenAI. Europe scoffs, and gets bogged down in long-winded, bureaucratic, vague and low impact Horizon projects, while the US gets on with getting things done. In truth we look to the US for investment and that is the market most want to expand in as it is the largest growth market on the planet. They have become so dominant that they merely buy European companies in AI.

 

Ethical quicksand

Generative AI has launched a thousand quangos, groups and bad PhDs on ‘AI

and ethics’ across Europe. You can’t move for reports, frameworks and regulations which  rain down on us from publicly funded organisations, with far too little attention on potential solutions and benefits. The debate in Higher Education focused largely. Not on learning, but plagiarism. Far too little debate has taken place on the benefits in education and health,

 

Debate on the benefits has been swept aside by pontificating and grand-standing. It is easy to stand on the sidelines as part of the jeering, pessimist mob, less easy to do something positive to actually solve these issues. Rather than solve the problems of alignment, guard-railing with real solutions, the EU has chosen to see the glass, not as half full, but as brimming with hemlock. It sees laws and fines as the solution, not design and engineering.

 

The EU has no laws banning VPNs and their use is becoming more common. This is a huge loophole when using AI services. It is already happening with Bard as the internet is like water, it tends to seep round and into places, based on demand.

 

Conclusion

It is an inconvenient truth but the EU is too late to the party, the US and China have forged ahead in IT and AI with their own tech giants. The EU has deliberately choosing the path of being some sort of global regulator but it has a weak economy, weak research, weak investment and a weak entrepreneurial culture. In the same way that the Ukraine war showed the EUs lack of investment in defence and a lack of any overall defence policy, where not for the first time it had to rely on the US to come to its aid and provide arms, cash and expertise, so it is with AI. 

 

The investment is low, there is no policy other than taking a morally superior stance. So much energy has gone into ethical hand-wringing that Europe is reduced to being a bystander. It thinks it has sway but it is a fraction of the world’s population and shrinking, and white Eurocentrism now seems more than a little dated. It rides its lumbering moral high-horse, looking down on the rest of the world, while others like the US feed it a little hay to keep it happy and speed past. It would surely be better developing AI solutions that have identified benefits in productivity, learning and healthcare, than simply regulating it.