Chinese authorities are taking steps to regulate the artificial intelligence (AI) industry, aiming to ensure consumer safety.
Chinese authorities are taking steps to regulate the artificial intelligence (AI) industry,
aiming to ensure consumer safety. The Cyberspace Administration of China (CAC) has
proposed additional requirements for firms launching generative AI systems, including
the need for licensing. If approved, the new licensing regime could be introduced by the
end of the month, with the CAC acting as the regulatory watchdog.
These measures build upon the Chinese government’s earlier plan, which allowed a 10-
day window for AI product registration with relevant authorities. The new proposal aims
to ensure that AI products align with the government’s objectives.
Data Sources Required to be Cited
According to the draft rules, all AI-generated content should not subvert state power,
advocate for the overthrow of the socialist system, incite the division of the country, or
undermine national unity.
To combat misinformation, the draft rules also emphasise the importance of clear
labelling for AI-generated content. Developers are urged to take precautions to ensure
compliance with existing laws against discrimination and copyright regulations when
using generative AI platforms. The legislation also includes a mandatory security
review: developers are required to submit relevant information to authorities, including
data used for training AI models.
China has demonstrated a strong commitment to policing AI, as evidenced by the
restrictions placed on OpenAI’s ChatGPT due to violations of laws and regulations. In
May, Chinese authorities arrested an individual for using ChatGPT to spread fake news,
potentially resulting in a ten-year prison sentence.
Giant Tech Firms on the Watch
Major Chinese tech firms, such as Baidu, Alibaba, and SenseTime, are closely
monitoring the incoming regulations as they aspire to develop their own generative AI
platforms to compete with OpenAI and Google’s Bard.
China’s cautious approach to innovative technologies is evident from its blanket ban on
digital currencies in 2021. Past sanctions have led to speculation that a similar path
may be adopted for AI if the new legislation fails to standardise the industry.
Regulators worldwide are racing to establish guidelines for AI developers, with the
European Union (EU) taking the lead. The proposed EU AI Act leans towards banning AI-
based predictive policing and emotion recognition systems, while ensuring compliance
with the region’s privacy laws.
CEOs involved in AI have expressed concerns about overly strict regulations. They warn
of a potential exodus to more accommodating jurisdictions in a strongly worded letter
to EU regulators.
AI Regulations Raise International Tensions
In a separate development, the US-China tech war is being further complicated by the
rising stakes in the AI sector. This was evident at the World Artificial Intelligence
Conference (WAIC) held in Shanghai, where tensions between the US and China were
prominent. While the event featured major domestic players, the absence of significant
sponsorship from US tech giants highlighted the challenges they face in operating in
China.
Elon Musk, CEO of Tesla and SpaceX, made headlines as the only prominent foreign
figure at the conference. In his speech, Musk expressed his belief in China’s prowess in
AI and its potential to excel in the field. However, some US officials have disputed this.
US tech firms such as Apple, Amazon, and Microsoft had low-key appearances at the
conference, which primarily showcased China’s leading tech companies. Huawei and
SenseTime, both under US sanctions, were sponsors, alongside Tencent, Ant Group, and
Alibaba.
China has designated AI as one of seven “frontier technologies” for development, and
the surge in popularity of ChatGPT has sparked a new AI race in the country. China is
rapidly catching up in the field of large language models (LLMs), with Beijing being a
hub for AI activity. The country now has more generative AI start-ups than any other.
Many exhibitors at WAIC showcased ChatGPT-like products for various industries.
Concerns about content control impacting machine learning have been raised, but
Chinese tech firms are investing resources in developing their own LLMs and
addressing this challenge.
While AI holds risks related to intellectual property rights, privacy, and fraud, Chinese
state media acknowledges its potential as an important driver for industrial
transformation. Consequently, Big Tech companies like Alibaba have emphasised the
need for regulatory restraint, recognising the challenges ahead.
In addition to regulations, Chinese firms face obstacles in accessing advanced chips for
AI applications due to US restrictions. Nonetheless, Baidu claims that the latest version
of its Ernie Bot has surpassed ChatGPT in certain Chinese-language tasks.
Expanding beyond the domestic market may prove challenging, but Hong Kong aims to
facilitate this by leveraging its strengths in science and education. The city’s financial
secretary, Paul Chan Mo-po, attended WAIC to promote Hong Kong as an attractive
investment destination.
While some tech leaders like Musk are pro-China, they face opposition in their home
countries. The complex interplay between AI development and geopolitical tensions
adds another layer of complexity to the US-China tech war.
