EU lawmakers pass landmark artificial intelligence regulation

Generative AI has been a rare bright spot in a European tech market reeling from declining funding and a pullback in valuations.
Yuichiro Chino | Moment | Getty Images

The European Parliament has approved the bloc’s landmark rules for artificial intelligence, known as the EU AI Act, clearing a key hurdle for the first formal regulation of AI in the West to become law.

The rules are the first comprehensive regulations for AI, which has become a key battleground in the global tech industry, as companies compete for a leading role in developing the technology — particularly generative AI, which can generate new content from user prompts.

What generative AI is capable of, from producing music lyrics to generating code, has wowed academics, businesspeople, and even school students. But it has also led to worries around job displacement, misinformation, and bias.

During a critical Wednesday vote, the Parliament adopted the AI Act with 499 votes in favor, 28 against and 93 abstentions. The regulation is far from becoming law, but it is likely to be one of the first formal rules for the technology globally.

European Parliament members agreed to bring generative AI tools like ChatGPT under greater restrictions. Generative AI developers will be required to submit their systems for review before releasing them commercially.

The Parliament also decided to hold firm with a ban on real-time biometric identification systems, as well as controversial “social scoring” systems.

Human rights campaigners had expressed concern over an attempt by the European People’s Party to water down the ban. Lawmakers nevertheless pressed ahead with it and agreed to prohibit biometric surveillance from all public settings.

The laws have huge implications for developers of generative AI models, such as the Microsoft-backed OpenAI’s ChatGPT and Google’s Bard.

Jens-Henrick Jepenssen, senior director of public policy at Workday, said that the AI Act aims to “build safeguards on the development and use of these technologies to ensure we have an innovation-friendly environment for these technologies such that society can benefit from them.”

“Those are the right goals in my view,” he told CNBC after the vote.

The next stage is for negotiators at EU institutions, such as the EU executive body and 27 member states.

Earlier in the day, Github CEO Thomas Dohmke called on European regulators to listen to the private sector, as it pushed ahead with rules for AI.

“We encourage the European Union and the US government to move really fast and listen to those that built the technology, not only in the commercial business, but also in universities, in the open-source communities,” Dohmke told CNBC’s Arjun Kharpal.

It comes as countries around the world are looking to bring in rules and standards for AI.

On Monday, U.K. Prime Minister Rishi Sunak made a bold pitch to make the U.K. the “geographical home” of AI safety regulation. The government is also gearing up to hold a global summit on AI safety later this year.

WATCH: A.I. regulation is almost trying to move in parallel with innovation, Goldman Sachs says