Both the United States and China are pursuing national policies to promote the development of artificial intelligence (AI). In the United States, the White House’s recently announced AI Action Plan features a deregulatory approach to drive innovation and build an AI infrastructure that could be exported overseas. The Chinese government’s AI plan instead proposes a global consensus-building organization that would seek a balance between AI development and security.
The competition between these contrasting approaches may be expected to have major implications for the adoption of AI around the world and, thus, for the future of the global economy. A consistent deregulatory emphasis might be a winning American strategy.
America’s AI Action Plan
“America’s AI Action Plan,” unveiled in a July 23 White House announcement, proclaims that “America must have the most powerful AI systems in the world” and “must also lead the world in creative and transformative application of these systems. Achieving these goals requires the Federal government to create the conditions where private-sector-led innovation can flourish.”
The action plan’s three pillars declare the administration’s intent to:
- accelerate AI innovation;
- build American AI infrastructure; and
- lead in international AI diplomacy and security.
The first pillar merits particular attention.
Accelerate AI Innovation
The plan’s innovation pillar encompasses various initiatives to support the rapid adoption and application of AI by government, businesses, and workers. The key policy focus is to reduce regulatory burdens, with the plan mandating that:
all Federal agencies . . . identify, revise, or repeal regulations, rules, memoranda, administrative orders, guidance documents, policy statements, and interagency agreements that unnecessarily hinder AI development or deployment.
The clear aim is to eliminate excessive federal AI regulation to the extent legally possible. For example, Biden-era Federal Trade Commission (FTC) enforcement actions that “advance theories of liability that unduly burden AI innovation” are to be set aside.
State AI regulation is also actively discouraged to the extent allowed by law. The AI plan takes specific aim at state AI regulations that interfere with the Federal Communications Commission’s (FCC) ability to carry out its statutory responsibilities. Furthermore, the plan would steer AI-related discretionary federal funding away from states whose “regulatory regimes may hinder the effectiveness of that funding or award.”
This deregulatory tilt reflects continued support for the “permissionless innovation” policy that drove the internet’s development. Permissionless innovation means “that anyone should be able to innovate without having to seek permission from a government or other authority.” The strategy allowed the internet to grow freely without regulatory authorization or oversight. The direct result was unprecedented innovation and huge economic dividends generated by U.S. firms, benefiting both the American and global economies.
Permissionless innovation does not mean freedom from legal requirements that protect health, safety, and business on the merits. AI innovators, like the internet pioneers that came before them, remain fully subject to the full range of U.S. civil and criminal laws, including national security, antitrust, consumer rights, environmental protection, and civil rights, to name just a few.
By reducing the expected weight of regulatory burdens, the AI Plan may be expected to encourage additional investments in and the faster implementation of AI systems. In turn, these effects could stimulate U.S. competition in AI-related sectors and speed innovation, providing economic growth dividends and benefits to American businesses and consumers. U.S. international competitiveness in AI and AI-related markets would benefit.
Build American AI infrastructure
Nine separate proposals are aimed at creating a robust U.S. AI Infrastructure. These include streamlined permitting for AI-supported infrastructure, promoting an AI-supportive electric grid, developing a skilled workforce for AI infrastructure, and ensuring cybersecurity.
AI diplomacy and security
The AI Action Plan’s final pillar emphasizes exporting American AI to allies and partners; strengthening AI-related export controls, national-security protections, and risk assessments; and countering Chinese influence in international governance bodies.
The plan notes that AI governance frameworks and development strategies proposed by international organizations too often consist of burdensome regulations and vague “codes of conduct” that promote cultural agendas that do not align with American values. Many also have been influenced by Chinese companies who seek to shape standards for facial recognition and surveillance.
In response, the action plan recommends “leverage[ing] the U.S. position in international diplomatic and standard-setting bodies to vigorously advocate for international AI governance approaches that promote innovation, reflect American values, and counter authoritarian influence.”
Chinese Government Global Plan for AI
In a July 26 speech, just three days after the White House released its AI Action Plan, Chinese Premier Li Qiang proposed a global organization to oversee the development of AI.
According to the Chinese government, Li “call[ed] for the early formation of a global framework and rules that have broad consensus to guide the development and use of AI.” He noted the need “to strike a balance between development and security.” He added that China is willing “to offer more Chinese solutions.” In particular, “China stands ready to undertake joint technical research with other countries, and will be more open in sharing open-source technology and products.”
China’s support for a new global AI authority, cloaked in “consensus-building” language, stands in sharp contrast to the deregulatory and competition-driven model forwarded by the AI Action Plan, which the United States would promote through economic diplomacy focused on existing international bodies and friendly nations.
The Big Competition
The two recent government announcements provide a preview of the coming global competition between starkly contrasting models from China and the United States—widely regarded as the two major global players in AI.
China
China is a formidable force in AI development. China’s 2017 “New Generation AI Development Plan” revealed the nation’s intent to become the global leader in AI by 2030. The Chinese government has worked closely with its national tech giants to make them AI leaders, and has encouraged data collection to build AI models. Chinese agencies and businesses have introduced AI at all levels.
China has aggressively sought to have Chinese AI systems adopted in Asia, Africa, and South America. Moreover, with government support, Chinese firms are opening offices and entering partnerships in the Middle East, Europe, and the United States.
China is also investing heavily in AI education and in AI military applications.
United States
According to an assessment from the Center for a New American Security, the United States still:
leads the world in large-scale AI development, driven in part by its leading talent and innovation ecosystem, but also by its access to cutting-edge ‘compute’ – the specialized chips, data centers, and infrastructure needed to train and deploy the most capable AI systems.
The U.S. government is not emulating China’s heavy government control over AI development. The AI Action Plan’s provisions dealing with labor and infrastructure instead reflect this “light touch” approach. The plan instead primarily focuses on encouragement through easing burdens on the private sector, rather than detailed industrial-policy directives.
Most significantly, the AI Action Plan has an overarching deregulatory focus. It leaves it to entrepreneurs to produce new AI innovations, free from government micromanagement.
The Bottom Line
Competition on the merits among competing AI systems, like competition in general, should tend to benefit society. It can be a “win” for economic welfare worldwide, yielding an optimal array of products and services.
The extent of direct Chinese government involvement in developing and promoting its vision of AI is, however, a complicating factor. The U.S. government may be expected to resist Chinese policies that would generate anticompetitive market distortions in AI markets.
A consistent U.S. government approach of deregulation and “permissionless invitation” just might be the “secret sauce” needed to achieve global success for American AI, assuming geopolitical obstacles can be surmounted.
