The Folly of AI Regulation

ABSTRACT:

The explosive growth of AI related technology has drawn the attention of government authorities around the globe. As these authorities consider various regulatory proposals, this chapter advocates a model similar to the one used when the internet first emerged, that is, a relatively restrained approach to regulation. This position is founded on several core tenets. First, there can be trade-offs between technological growth rates and addressing specific harms. Thus, even if a regulation is ultimately successful in addressing a specific harm, if it dampens the rate of innovation, then this could lead to a net welfare loss. Second, premature regulatory solutions can crowd out market-based solutions, which may offer more efficient solutions to emergent harms. Finally, premature regulations can have the consequence of entrenching incumbents and raising barriers to entry, which, perversely, harms the competitive process rather than promoting it. Importantly, this proposal is not a call to ignore the dangers that AI generated output can pose – nor is it a call for a “more permissive” treatment of AI under existing laws or existing regulatory schemes of general application.