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ChatGPT broke the EU plan to regulate AI
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Artificial intelligence’s newest sensation — the gabby chatbot-on-steroids ChatGPT — is sending European rulemakers back to the drawing board on how to regulate AI.
The chatbot dazzled the internet in past months with its rapid-fire production of human-like prose. It declared its love for a New York Times journalist. It wrote a haiku about monkeys breaking free from a laboratory. It even got to the floor of the European Parliament, where two German members gave speeches drafted by ChatGPT to highlight the need to rein in AI technology.
But after months of internet lolz — and doomsaying from critics — the technology is now confronting European Union regulators with a puzzling question: How do we bring this thing under control?
The technology has already upended work done by the European Commission, European Parliament and EU Council on the bloc’s draft artificial intelligence rulebook, the Artificial Intelligence Act. The regulation, proposed by the Commission in 2021, was designed to ban some AI applications like social scoring, manipulation and some instances of facial recognition. It would also designate some specific uses of AI as “high-risk,” binding developers to stricter requirements of transparency, safety and human oversight.
The catch? ChatGPT can serve both the benign and the malignant.
This type of AI, called a large language model, has no single intended use: People can prompt it to write songs, novels and poems, but also computer code, policy briefs, fake news reports or, as a Colombian judge has admitted, court rulings. Other models trained on images rather than text can generate everything from cartoons to false pictures of politicians, sparking disinformation fears.
In one case, the new Bing search engine powered by ChatGPT’s technology threatened a researcher with “hack[ing]” and “ruin.” In another, an AI-powered app to transform pictures into cartoons called Lensa hypersexualized photos of Asian women.
“These systems have no ethical understanding of the world, have no sense of truth, and they’re not reliable,” said Gary Marcus, an AI expert and vocal critic.
These AIs “are like engines. They are very powerful engines and algorithms that can do quite a number of things and which themselves are not yet allocated to a purpose,” said Dragoș Tudorache, a Liberal Romanian lawmaker who, together with S&D Italian lawmaker Brando Benifei, is tasked with shepherding the AI Act through the European Parliament.
Already, the tech has prompted EU institutions to rewrite their draft plans. The EU Council, which represents national capitals, approved its version of the draft AI Act in December, which would entrust the Commission with establishing cybersecurity, transparency and risk-management requirements for general-purpose AIs.
The rise of ChatGPT is now forcing the European Parliament to follow suit. In February the lead lawmakers on the AI Act, Benifei and Tudorache, proposed that AI systems generating complex texts without human oversight should be part of the “high-risk” list — an effort to stop ChatGPT from churning out disinformation at scale.
The idea was met with skepticism by right-leaning political groups in the European Parliament, and even parts of Tudorache’s own Liberal group. Axel Voss, a prominent center-right lawmaker who has a formal say over Parliament’s position, said that the amendment “would make numerous activities high-risk, that are not risky at all.”
The two lead Parliament lawmakers are working to impose stricter requirements on both developers and users of ChatGPT and similar AI models | Pool photo by Kenzo Tribouillard/EPA-EFE In contrast, activists and observers feel that the proposal was just scratching the surface of the general-purpose AI conundrum. “It’s not great to just put text-making systems on the high-risk list: you have other general-purpose AI systems that present risks and also ought to be regulated,” said Mark Brakel, a director of policy at the Future of Life Institute, a nonprofit focused on AI policy.
The two lead Parliament lawmakers are also working to impose stricter requirements on both developers and users of ChatGPT and similar AI models, including managing the risk of the technology and being transparent about its workings. They are also trying to slap tougher restrictions on large service providers while keeping a lighter-tough regime for everyday users playing around with the technology.
Professionals in sectors like education, employment, banking and law enforcement have to be aware “of what it entails to use this kind of system for purposes that have a significant risk for the fundamental rights of individuals,” Benifei said.
If Parliament has trouble wrapping its head around ChatGPT regulation, Brussels is bracing itself for the negotiations that will come after.
The European Commission, EU Council and Parliament will hash out the details of a final AI Act in three-way negotiations, expected to start in April at the earliest. There, ChatGPT could well cause negotiators to hit a deadlock, as the three parties work out a common solution to the shiny new technology.
On the sidelines, Big Tech firms — especially those with skin in the game, like Microsoft and Google — are closely watching.
The EU’s AI Act should “maintain its focus on high-risk use cases,” said Microsoft’s Chief Responsible AI Officer Natasha Crampton, suggesting that general-purpose AI systems such as ChatGPT are hardly being used for risky activities, and instead are used mostly for drafting documents and helping with writing code.
“We want to make sure that high-value, low-risk use cases continue to be available for Europeans,” Crampton said. (ChatGPT, created by U.S. research group OpenAI, has Microsoft as an investor and is now seen as a core element in its strategy to revive its search engine Bing. OpenAI did not respond to a request for comment.)
A recent investigation by transparency activist group Corporate Europe Observatory also said industry actors, including Microsoft and Google, had doggedly lobbied EU policymakers to exclude general-purpose AI like ChatGPT from the obligations imposed on high-risk AI systems.
Could the bot itself come to EU rulemakers’ rescue, perhaps?
ChatGPT told POLITICO it thinks it might need regulating: “The EU should consider designating generative AI and large language models as ‘high risk’ technologies, given their potential to create harmful and misleading content,” the chatbot responded when questioned on whether it should fall under the AI Act’s scope.
“The EU should consider implementing a framework for responsible development, deployment, and use of these technologies, which includes appropriate safeguards, monitoring, and oversight mechanisms,” it said.
The EU, however, has follow-up questions.
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Gian Volpicelli
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How to pay for reparations in California? ‘Swollen’ wealth could replace ‘stolen’ wealth through taxes
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The panel responsible for the nation’s first state-level exploration of reparations for Black Americans discussed an important question this weekend: How will the state pay for reparations?
The California reparations task force listened to testimony from experts who suggested possible sources for compensation, after previous meetings had touched on the potential for hundreds of thousands of dollars in monetary reparations for specific harms. The experts’ suggestions included taxing the rich, such as through a state estate tax or a “mansion tax”; incentivizing the wealthy to help fund reparations by providing tax breaks, akin to how charitable giving minimizes one’s tax burden; or helping all taxpayers with below-median wealth by means of a tax credit, which would in turn help Black households.
Suggestions from the expert testimony, given at the task force’s meeting at San Diego State University on Friday, could be incorporated into the body’s final recommendations to the state legislature, which are due this summer.
“This is incredibly insightful and provocative,” said Lisa Holder, a task force member. “It gives us lots to think about.”
The experts’ suggestions about possible sources of funding were based on their testimony that current U.S. tax laws favor the wealthy — who are most likely to be white.
“Our tax laws as written have a disparate impact,” said Dorothy Brown, a tax professor at Georgetown Law and author of the book, “The Whiteness of Wealth: How the Tax System Impoverishes Black Americans and How We Can Fix It.” She said “Black people are likely to pay higher taxes” because they are less likely to gain access to the same tax breaks as their white peers.
Key Words: California reparations push needs to be a ‘game-changer,’ author of bill says
Brown said what would be ideal is a reparations tax credit designed to compensate Black taxpayers, but she thinks it would face legal challenges. So she said the next best thing would be “a wealth tax credit applicable to all taxpayers in households with below-median wealth.”
“Given the racial wealth disparity, this will result in a disproportionate percentage of Black households receiving the credit,” she testified
A pair of estate planners who testified introduced the idea of taxing “swollen” wealth to replace “stolen” wealth, and showed that the racial wealth gap widened after 1981 — when the biggest tax cut in American history was enacted. They cited Federal Reserve figures from 2019 that showed the average white household had $812,000 more wealth than the average Black household.
One of their suggestions for sources of money for reparations is a state estate tax. (Under federal law, the lifetime estate-tax exemption is $12.9 million for individuals this year.) Their other suggestions include: a mansion tax, a graduated-property tax — which they acknowledged may not be likely in California because Proposition 13 taxes properties based on their value when they were sold — or even a tax on the fledgling “metaverse.”
Sarah Moore Johnson, founding partner at Washington, D.C.-based Birchstone Moore, is one of the estate planners who testified. She proposed a state-sponsored reparations tax fund that could receive charitable contributions.
“Charitable contributions are currently permitted to the state or federal government, but only for public purposes,” she said. “If racial repair is recognized as a public purpose,” it could be tax-deductible in the same manner as charitable contributions, she said.
Acknowledging that the idea of reparations continues to be controversial, task force member state Sen. Steven Bradford asked the experts whether they think wealthy people, like their clients, would be opposed to such ideas.
“What I hear from my clients is a level of guilt about being able to give this much money to their heirs,” Moore Johnson said. “From where I sit and what I see, I see some support.”
Raymond Odom, an estate-tax lawyer and director of Wealth Transfer Services at Northern Trust in Chicago who co-presented with Moore Johnson, echoed that sentiment.
Odom said he has helped “wealth get concentrated” for decades, and how that happens is through very wealthy people setting up foundations and charities that allow them to avoid taxes. “It’s a joy being able to talk to people who could change that,” he said, adding that he has “talked to wealthy white folks who are behind this.”
“I can tell you unequivocally: Very wealthy people have lots of trouble figuring out what to do with their wealth,” Odom told the task force.
The Value Gap: Reparations are a ‘human rights issue’ that will boost the economy, says California task-force chair
Addressing the possibility of relying on charitable sources, task force member Don Tamaki said, “I can’t argue with the fact that charity is not reparations. But in my humble opinion, we need to explore every avenue of funding.”
Wherever any possible compensation comes from, Brown, the tax professor and author, had two key suggestions for the task force. First, she said reparations should not be treated as taxable income, citing precedent such as tax-free treatment of Holocaust payments, and Japanese-Americans who received compensation because of their mass incarceration during World War II. And her second suggestion was that Black Americans should not have to pay for their own reparations, which she said “would be entirely inconsistent with the intent and spirit of the task force’s goals.”
See: Historic report lays out case to compensate descendants of slaves in California
The nine-member task force, established by a 2020 law and responsible for studying and developing reparations for Black Americans because of slavery, released a preliminary report last year. It is set to disband when it submits its final report and recommendations to the state legislature by its July 1 deadline, but on Saturday the task force voted to remain intact for another year — until July 1, 2024 — to help with the implementation of its proposals, despite questions from some of its members about whether it had the authority to decide to do so.
The task force also voted to change the dates of its next meeting, which was previously scheduled for the end of February. In what could be the final in-person meeting before the report is due will be held March 3 and 4 in Sacramento.
Related: Reparations task force also wants to change California policies
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WSJ News Exclusive | Activist Investor Ryan Cohen Takes Stake in Alibaba and Pushes for More Stock Buybacks
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[ad_2]Cohen first contacted the Chinese e-commerce giant’s board in August to say he saw the company’s shares as undervalued
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Kevin McCarthy’s Reckoning
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Republicans today could take control of the House of Representatives, giving them a foothold of power in Washington from which to smother Joe Biden’s agenda and generally make life hell for the president and his family.
Or they might not.
It all depends on whether Representative Kevin McCarthy of California, the GOP House leader, can lock down the final votes he needs to become speaker. As of this morning, McCarthy was short of the 218 required for a majority. He can afford to lose only four Republicans in the party-line vote if all members are present. So far, at least five and potentially more than a dozen far-right lawmakers remain opposed to McCarthy’s candidacy or are withholding their support.
Should McCarthy falter on the first vote, to be taken shortly after the 118th Congress gavels into session at noon, the House would remain in a state of limbo. (Democrats and more than a few Republicans might call it purgatory.) Without a speaker, the House can do nothing. It cannot adopt the rules it will use to operate for the next two years; it cannot debate or pass legislation; it cannot form committees and name chairs; it cannot unleash the torrent of subpoenas that Republicans have vowed to send the Biden administration’s way. Without a speaker, in other words, the GOP has no majority.
So for the moment, the functioning of the legislative branch depends on McCarthy’s ability to wrangle votes. And like any deadlocked negotiation on Capitol Hill, his—and the GOP’s—predicament could be resolved quickly, or it could endure for quite a while. If no candidate receives a majority of votes on the first ballot for speaker this afternoon—the only candidate who has a legitimate chance on that roll call is McCarthy—then the House must keep voting until someone does. McCarthy has said he will not drop out after the first ballot, effectively hoping to wear down his GOP opposition or cut deals that will secure him the votes he needs. (His office did not respond to a request for comment last night.) He has little hope of appealing to Democrats, who neither trust nor respect a Republican leader who has spent the past seven years cozying up to Donald Trump.
The vote for speaker is the most formal of congressional roll calls and lasts well over an hour. Beginning alphabetically by last name, the clerk calls out the name of each of the 435 members, who then reply verbally with the candidate of their choice. No speaker vote has gone to a second ballot in more than a century, leaving no modern precedent for what happens if McCarthy does not get the support of 218 members. He could strike a quick deal and win on a second ballot by nightfall, or the series of ballots could drag out for days or even weeks, especially if the House recesses so that Republicans can convene privately to figure out what to do.
McCarthy is known for being affable but has no reputation for tactical or legislative brilliance. He has desperately tried to placate the five most ardent holdouts—a quintet that includes the Trump loyalist Representative Matt Gaetz of Florida—with concessions that would empower individual members at the expense of McCarthy’s sway as speaker. The most contentious of these involves what’s known as the “motion to vacate,” a mechanism by which members can force a vote to depose the speaker.
Until recent years, the motion to vacate was a rarely used relic of procedural arcana. But in 2015, then-Representative Mark Meadows of North Carolina—an ambitious conservative who would go on to greater notoriety as Trump’s final chief of staff—dusted off the motion to vacate and essentially pushed Speaker John Boehner into retirement. When Democrats regained the House majority in 2019, Nancy Pelosi, who’d once again ascended to the speakership, engineered a rules change so that only members of the party leadership could deploy the motion to vacate. McCarthy was hoping to keep that change largely in place, but his GOP opponents have demanded that the House revert to the old rules, which would make it much easier for them to oust the speaker as soon as he antagonized them (say, by going around conservatives to pass legislation with Democrats). Over the weekend, McCarthy told Republicans he’d be willing to create a five-member threshold for forcing a vote on the speaker—a significant move on his part but still not as far as his critics on the right would like.
Although the speaker vote today could be the most suspenseful in memory, McCarthy himself is not in an unfamiliar position. In 2015, he was the presumed successor to Boehner, but a poorly timed gaffe and mistrust among conservatives forced him to withdraw before the vote. He seems intent on avoiding that fate this time around. Nonetheless, McCarthy’s opponents see him as a stooge of the party establishment that they ran to dismantle; they also just don’t seem to like him very much. As yet, McCarthy has no real challenger. But the hardline holdouts have teased a mystery candidate who could step forward on the second ballot, and McCarthy’s ostensibly loyal second-in-command, Representative Steve Scalise of Louisiana, could emerge as a potential consensus choice.
“Governance will be a challenge,” Oklahoma’s Tom Cole, a longtime Republican lawmaker and McCarthy ally, told me a couple months ago. He said it back when Republicans seemed to be on the verge of a resounding midterm victory, one that likely would have smoothed McCarthy’s path to the speakership. Now it sounds like a significant understatement.
The high likelihood is that eventually, perhaps even today, Republicans will claim the narrow House majority that they won at the polls. But even if McCarthy squeaks by on the first or second ballot, the party’s struggle simply to organize itself behind a leader won’t soon be forgotten. It will stand as a painful reminder of the GOP’s electoral underperformance in November, and, almost certainly, it will serve as a harbinger of a rocky two years to come.
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Russell Berman
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Brussels’ uphill battle to confiscate Russian assets
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The European Commission is exploring legal options to confiscate Russian state and private assets as a way to pay for Ukraine’s reconstruction, according to a document seen by POLITICO.
The goal would be “identifying ways to strengthen the tracing, identification, freezing and management of assets as preliminary steps for potential confiscation,” according to the document.
The potential bounty would consist of nearly $300 billion frozen Russian central bank assets, as well as assets and revenues of individuals and entities on the EU’s sanctions list. The idea was floated already in May, and is supported by Kyiv, as well as Poland, the Baltics and Slovakia. EU leaders in October tasked the Commission to look into legal options to seize Russian assets currently frozen under sanctions.
But the conundrum is that there’s currently no legal mechanism to confiscate Russian assets — as pointed out by U.S. Treasury Secretary Janet Yellen back in May. It would need to be created.
“There may be a path for the EU to validly confiscate frozen assets under international law, but it is likely a narrow, a long and an untested path,” said Jan Dunin-Wasowicz, a lawyer at Hughes Hubbard & Reed.
That isn’t deterring the Commission from looking into it.
With regards to private assets belonging to sanctioned people or entities, Brussels is readying proposals to make sanctions evasion an EU crime, a step which would facilitate their confiscation — but only in case of a criminal conviction. Even then, the EU would need to argue each case in court, likely having to litigate for years.
That’s because a lot of these assets would be considered foreign investments, which enjoy protection against expropriation without compensation and a right to fair and equitable treatment under international treaties that Russia has with a lot of EU countries.
The confiscating authority would also need to draw a clear link between the property owner and the conflict in Ukraine.
“To ensure proportionality, you would need to look at who are the owners, what did they do, et cetera,” said Stephan Schill, professor of international and economic law and governance at the University of Amsterdam.
With regards to frozen foreign reserves of the central bank, the largest money pot, the EU executive writes in the document that “these are generally considered to be covered by immunity,” with a footnote pointing to a U.N. convention on jurisdictional immunities of foreign states and their property, which is however not yet in force.
“From an international law perspective, it’s pretty clear that without Russia’s consent you can’t use Russian central bank assets,” said Schill.
As for assets of Russian-owned state enterprises, the paper notes that these wouldn’t be “in principle” covered by such convention, but grabbing them may raise problems linked to the confiscation of private assets, “in addition to the need to demonstrate a sufficient connection to the Russian state.”
The EU is also mulling an “exit tax” on the assets or proceeds from assets of sanctioned individuals that want to transfer their property out of the EU. This could run into legal problems of its own, as it would target a specific group of individuals — which runs counter to non-discrimination provisions in international law — and they in turn could invoke the human right to property as a defence.
To Schill’s knowledge, there is no recent and valid precedent for any of these options.
“The EU and member states are trying to introduce new criminal law,” he said.
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Paula Tamma
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Biden addresses COP27 on firmer climate footing, but world wants U.S. leadership on pollution
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President Joe Biden addressed the U.N. climate summit Friday with his Democratic party having survived a projected Republican “red wave” in the midterm elections — and in doing so protecting at least the bulk of a landmark climate-change spending law he signed this year.
Biden addressed the U.N.’s Conference of the Parties (COP27) climate summit in Egypt on his way to Bali, Indonesia, for the Group of 20 meeting and a planned sit-down with China’s Xi Jinping.
In August, Biden signed the largest U.S. investment in fighting climate change ever, the Inflation Reduction Act (IRA). That puts him on stronger footing on the global stage than at last year’s COP26 gathering in Scotland, when American commitments to carbon reduction weren’t backed by law.
Four themes color Biden’s trip: Russia’s war in Ukraine, escalating trade and security tensions with China, the potential for a global recession in the coming months and the existential problem of climate change.
“The climate crisis is about human security, economic security, environmental security, national security and the very life of the planet,” Biden said in his address to the summit.
Biden apologized to the group for the U.S. pulling out of the Paris Climate Accord — and its global-warming limit of 1.5 degrees Celsius (equivalent to 2.7 degrees Fahrenheit) — which the country did briefly under President Donald Trump. In a remark that garnered speech-pausing applause from the audience, Biden said the U.S. commitment to the global effort, struck in Paris in 2015 and reaffirmed each year, is apparent in the climate-focused IRA.
Biden also highlighted a proposal that would require large federal contractors to develop carbon-reduction targets and disclose their greenhouse gas emissions, by which the administration hopes to use the federal government’s purchasing power to slow the impacts on climate from the private sector and bolster vulnerable supply chains.
“As the world’s largest customer, with more than $650 billion in spending last year, the United States government is putting our money where our mouth is to strengthen accountability for climate risk and resilience,” he said.
Talks with China still loom
Biden’s other task is to convince the summit participants of the U.S. commitment to engage with China, not only on trade and security matters, but also as part of an alliance between the world’s two top polluters to deliver on their carbon-reduction plans and show measurable progress. The U.S. has said it can reach net-zero emissions by 2050; China’s target date is 2060. Both countries have said they can show progress as soon as 2030, but some observers say time may be running out to hit that marker.
At the start of the COP27 summit, U.N. chief Antonio Guterres called for a historic agreement — or “climate solidarity pact” — between developed and emerging economies. The flagship climate conference runs Nov. 6-18.
The U.S. and China, the world’s two largest economies and top greenhouse-gas emitters, “have a particular responsibility to join efforts to make this pact a reality,” Guterres said earlier this week.
A domestic-policy win
Biden used Democrats’ better-than-projected midterm-election results as an opportunity to reassure the world that the U.S. is committed to doing its part to address threats to the planet as a whole, including climate change.
“If the United States tomorrow were to, quote, withdraw from the world, a lot of things would change around the world. A whole lot would change,” Biden said in remarks at a press conference on Nov. 9, the day after the election.
The IRA’s $375 billion commitment to climate efforts, including manufacturing and purchasing incentives for electric vehicles
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tax breaks for home solar and a boost to manufacturers who green up their operations, will provide Biden with leverage as he works to convince other countries to strengthen their own efforts to reduce greenhouse-gas emissions.Current and former Biden climate officials told the Associated Press that the IRA was crafted in a way that will make it difficult for a future Republican Congress or president to reverse it. That’s in part because of the law’s tax incentives, which are the sort of low-tax strategies normally favored by Republicans, and because much of the advancing green technology would bring jobs to strongly Republican states.
Republicans won’t have a veto-proof majority in the new Congress, even if the GOP ends up with an advantage of a few seats. And even if a Republican wins the White House in 2024, the tax credits will be in place and will already be spurring industry, said Samantha Gross, head of climate and energy studies at the centrist Brookings Institution.
“It’s a lot of tax credits and goodies that make it hard to repeal,” Gross said.
At the climate negotiations in Egypt, Biden’s special climate envoy, John Kerry, said, “Most of what we’re doing cannot be changed by anyone else who comes to Washington, because most of what we do is in the private sector. The marketplace has made its decision to do what we need to do.”
Still, it won’t be all smooth sailing for Biden. Republicans, who as of Friday were close to clinching a modest advantage in the House (control of the Senate will likely hinge on a runoff election in Georgia), have said they will work to repeal parts of the law and advance their own climate and energy bill. They have accused Biden of contributing to rising energy prices by blocking more drilling of U.S. fossil fuels
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Those fossil fuels are the major contributor to climate change.While Biden may be moving slower than Republicans would like when it comes to permitting, he has in fact called for more oil drilling to help calm energy markets during the Russia-Ukraine crisis and has even chastised profitable oil companies for not releasing more product. It’s a narrow line for the president to walk and in doing so, he has raised the ire of some environmental groups.
Related: Biden tightens methane emissions rule, but still wants more U.S. oil for now
Still, Biden argues there is scope for both near-term emergency energy policies and a long-term commitment to the transition from oil and gas.
“Russia’s war only enhances the urgency of the need to transition the world off its dependence on fossil fuels,” Biden said Friday. “[N]o action can be taken without a nation understanding that it can’t use energy as a weapon and hold the global economy hostage.”
Outside the U.S., there are also concerns that rising energy costs and a looming recession could dampen resolve to transition to cleaner energy. Germany has dipped back into heavy-polluting coal markets to ensure it has enough power for the cold winter ahead.
Methane remains a target
Efforts are under way at the COP27 summit to keep attention on methane, a more intense but shorter-lasting greenhouse gas than carbon emissions.
On Friday, the Biden administration detailed what it calls a “super-emitter response program” that would require oil and natural-gas
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operators to respond to credible third-party reports of high-volume methane leaks.With an updated methane initiative, proposed Environmental Protection Agency rules first floated last year now target all drilling sites, including smaller wells.
The EPA estimates that in 2030, the proposal would reduce methane from covered fossil-fuel sources by 87% from 2005 levels.
Related: Jeff Bezos helping fund U.N. effort to tag and alert methane emitters with data from space
The U.S. government also released a new draft report this year about how climate change is affecting America. The report determined that over the past 50 years, the U.S. has warmed 68% faster than the planet as a whole.
Since 1970, the continental U.S. has experienced 2.5 degrees Fahrenheit of warming, well above the average for the planet, according to a draft of the National Climate Assessment, which is the U.S. government’s definitive report on the effects of climate change and represents a range of federal agencies.
The effects of human-caused climate change on the United States “are already far-reaching and worsening,” the draft report says, but every added amount of warming that can be avoided or delayed will reduce harmful effects.
The Associated Press contributed.
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