This Friday, the European Union passed the AI Act, an EU-wide, landmark set of regulations on the usage of artificial intelligence. As you’d expect, it applies various levels of prohibition and permissioning for generative applications like ChatGPT. But it also applies to conventional tools, like facial recognition and, if you read it closely, even to things like plain-old linear regression. The impact is sweeping, and I suspect it will once more have a chilling effect on technology in Europe. This is dangerous for Europeans: in the long term, it may be yet another stone on a road to serfdom.
Do you think these regulation will have any impact for the large AI players, such as Microsoft? They do all their developments outside of the EU, and EU consumers can just use it over Azure, even if the datacentre is not in the EU.
On "how to fix it": the first step would be to stop the cancerous growth of the political class in Europe, who have no knowledge and believe their only reason to exist is to regulate and to give away other people's money.
Hence there is no fixing it unless there is a big breakdown. Some European nations may be able to do their own thing and fare a bit better. But where I am - Germany - it will get a lot worse before it gets better.
I agree with you that Europe needs to grow its own tech industries -- indeed I've been saying so for some time (e.g. https://pontifex.substack.com/p/an-independent-scotland-in-the-european ). Ideally Europe should control all of its tech stack, from chips to social media and internet services, and everything in between. because otherwise we'll end up being controlled by the likes of Google and Facebook.
I'm the founder of the space-tech company https://mission.space in Europe. A couple of weeks ago, the CEO of the ESA said that he did not need any billionaires from space tech in Europe. It means he would prefer something other than private, solid, independent space companies (from ESA) in Europe.
It's one of the craziest mindsets I've ever seen! ZERO mentioning of the commercial private companies in the eyes of the EC!
All the AI regulation looks like an absolute joke cause it stimulates the founders to leave the EU for the US.
Yesterday, the European Commission, non-elected lifetime officials who are not even paying taxes on their salary (since the EC is the diplomatic body), denied the founders of Figma the proper financial exit!
I still can't believe all of this nonsense happened in the last month.
We have a sharp decline in the European economy, and the only thing that can fix it ARE ONLY PRIVATE ENTREPRENEURS.
But do we need entrepreneurs when we have commissioners?
There is a very large missing gap in accountability between European citizens and their elected delegates. The absence of this feedback loop feeds the endless growth of the administrative state and all of the accompanying diseases of Kirchernism.
Very Important Article. I hope the Old World will one day give you reason to build here too.
I don't know enough to judge whether Providerism is a big problem, but it does seem consistent with what I do know. Granting its significance, we should ask "What powers in Europe *want* providerism to be dominant?" It can't be fixed without understanding and dealing with its supporters.
The pieces fall into place once you understand that the EU has lost most of its sovereignty. The EU was a US-led project post WW2. Not much has changed since. Look at the Ukraine war which is extremely bad for Europe with Germany now deindustrializing. EU was dragged into it against its interests.
You're right to say that the EU doesn't have a serious plan to encourage AI innovation but the calls to regulate AI are coming from tech CEOs in Silicon Valley. Almost nobody in Europe or America is openly calling for deregulation of AI.
You also seem to be conflating a small area in California with "America". Would you accuse the other 49 states of "providorism" because they consume products designed in California and manufactured in Asia?
It's also worth noting that Silicon Valley didn't become Silicon Valley solely because of deregulation and market forces. It was where the US government (which has the largest defence budget on earth) concentrated its investments in military R&D during the cold war. The EU can’t do this at anything like the same scale because defence budgets are managed by individual member states.
The EU’s digital markets act only applies to ‘gatekeeper’ tech firms with 45 million monthly users or a market capitalisation above €75 billion. Obviously none of them are European, meaning EU tech companies will play on easy mode. The officials in Brussels probably think that if they don’t regulate now they will see the same patten they’ve seen over the last 15 years whereby American tech firm (facebook and google) take over European markets at the expense of homegrown firms.
I think many of these are good points, but seems to go a bit too far.
Potential issues:
(1) Despite the issues you list, european countries are still reasonably wealthy and have exports (especially after accounting for PPP and labour productivity). Your point that this is on the decline seems worrying, would enjoy seeing more about that part.
(2) Potential viewpoint bias - if you lived in one place until age 18 it'll seem more provider-y because you were a child there (and SV is kind of the opposite extreme in many ways, and not a good baseline for America).
(3) This is true for software specifically but less true for other issues - America seems to struggle as much or more than europe at building physical things (especially infrastructure, where Europe dominates both America and, in many ways, East Asia).
Do you think these regulation will have any impact for the large AI players, such as Microsoft? They do all their developments outside of the EU, and EU consumers can just use it over Azure, even if the datacentre is not in the EU.
On "how to fix it": the first step would be to stop the cancerous growth of the political class in Europe, who have no knowledge and believe their only reason to exist is to regulate and to give away other people's money.
Hence there is no fixing it unless there is a big breakdown. Some European nations may be able to do their own thing and fare a bit better. But where I am - Germany - it will get a lot worse before it gets better.
Excellent article. On the money. We need a lesson honesty.
I agree with you that Europe needs to grow its own tech industries -- indeed I've been saying so for some time (e.g. https://pontifex.substack.com/p/an-independent-scotland-in-the-european ). Ideally Europe should control all of its tech stack, from chips to social media and internet services, and everything in between. because otherwise we'll end up being controlled by the likes of Google and Facebook.
Amazing piece!!!!
I'm the founder of the space-tech company https://mission.space in Europe. A couple of weeks ago, the CEO of the ESA said that he did not need any billionaires from space tech in Europe. It means he would prefer something other than private, solid, independent space companies (from ESA) in Europe.
Even more, I wrote the piece on how different regulators in Europe & US see the founders and mavericks of the space companies in their regulation- https://www.linkedin.com/posts/alexvs_europe-startups-regulations-activity-7138218293634424832-V_N8?utm_source=share&utm_medium=member_desktop
It's one of the craziest mindsets I've ever seen! ZERO mentioning of the commercial private companies in the eyes of the EC!
All the AI regulation looks like an absolute joke cause it stimulates the founders to leave the EU for the US.
Yesterday, the European Commission, non-elected lifetime officials who are not even paying taxes on their salary (since the EC is the diplomatic body), denied the founders of Figma the proper financial exit!
I still can't believe all of this nonsense happened in the last month.
We have a sharp decline in the European economy, and the only thing that can fix it ARE ONLY PRIVATE ENTREPRENEURS.
But do we need entrepreneurs when we have commissioners?
There is a very large missing gap in accountability between European citizens and their elected delegates. The absence of this feedback loop feeds the endless growth of the administrative state and all of the accompanying diseases of Kirchernism.
Very Important Article. I hope the Old World will one day give you reason to build here too.
I don't know enough to judge whether Providerism is a big problem, but it does seem consistent with what I do know. Granting its significance, we should ask "What powers in Europe *want* providerism to be dominant?" It can't be fixed without understanding and dealing with its supporters.
The pieces fall into place once you understand that the EU has lost most of its sovereignty. The EU was a US-led project post WW2. Not much has changed since. Look at the Ukraine war which is extremely bad for Europe with Germany now deindustrializing. EU was dragged into it against its interests.
A weak Europe benefits many, except Europeans.
Don’t forget LVMH though ;) Bernard putting the whole continent on his back selling absolutely useless shit
You're right to say that the EU doesn't have a serious plan to encourage AI innovation but the calls to regulate AI are coming from tech CEOs in Silicon Valley. Almost nobody in Europe or America is openly calling for deregulation of AI.
You also seem to be conflating a small area in California with "America". Would you accuse the other 49 states of "providorism" because they consume products designed in California and manufactured in Asia?
It's also worth noting that Silicon Valley didn't become Silicon Valley solely because of deregulation and market forces. It was where the US government (which has the largest defence budget on earth) concentrated its investments in military R&D during the cold war. The EU can’t do this at anything like the same scale because defence budgets are managed by individual member states.
The EU’s digital markets act only applies to ‘gatekeeper’ tech firms with 45 million monthly users or a market capitalisation above €75 billion. Obviously none of them are European, meaning EU tech companies will play on easy mode. The officials in Brussels probably think that if they don’t regulate now they will see the same patten they’ve seen over the last 15 years whereby American tech firm (facebook and google) take over European markets at the expense of homegrown firms.
You mean, Europe fails to create debt - like the 33 trillion dollar US debt?
https://www.wsj.com/economy/global/as-u-s-debt-surges-europe-brings-its-own-under-control-2ea6e58b
I think many of these are good points, but seems to go a bit too far.
Potential issues:
(1) Despite the issues you list, european countries are still reasonably wealthy and have exports (especially after accounting for PPP and labour productivity). Your point that this is on the decline seems worrying, would enjoy seeing more about that part.
(2) Potential viewpoint bias - if you lived in one place until age 18 it'll seem more provider-y because you were a child there (and SV is kind of the opposite extreme in many ways, and not a good baseline for America).
(3) This is true for software specifically but less true for other issues - America seems to struggle as much or more than europe at building physical things (especially infrastructure, where Europe dominates both America and, in many ways, East Asia).