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Platform Strategies 2025 Closing Keynote
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Platform Strategies 2025 Closing Keynote
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Segment:0 .
ANU BRADFORD: Excellent. Thank you so much, and good afternoon. What a terrific day you have had, and it's a real honor then to close it. So we look at the big picture of regulating artificial intelligence in today's geopolitical context. And before we talk about governing AI, we need to realize that there's not just a race to regulate. There's certainly a very intense race to develop these technologies, the AI race, and this feels like an existential race for many governments and the developers of these technologies.
ANU BRADFORD: This is the technology that is [INAUDIBLE] so much of our economy, that the rewards are tremendous if you win this race. Nobody wants to be left out when all these dividends are being distributed. We also know that this race feels even more existential because of the military, the geopolitical implications. AI is already central to today's warfare, and it will be even more central for modern warfare.
ANU BRADFORD: That makes the governments even more determined to be the first ones to win that race. So at the same time, when we talk about all these opportunities, we also realize that there are risks. Some of those are existential risks. We worry about our privacy. We worry about our democracy, about remaking our societies with increased inequality, unemployment if AI is replacing us as humans.
ANU BRADFORD: We also worry about catastrophic risks, risks to our humanity and civilization. So how do we then balance these risks and the opportunities? How do we think about governing AI. So there is no consensus on how to do that. And let me suggest that there are three primary ways about reorganizing the relationship between technology the markets, the state, and the individual.
ANU BRADFORD: There's the American market-driven regulatory model, the Chinese State-driven and the European, what I call, a rights-driven model. So the American market-driven model really wants to maximize free market, free internet, free speech, incentives to innovate. The governments are relegated to a trivial role, and the governance of technologies like AI is handy to the tech companies themselves.
ANU BRADFORD: So this is a techno-optimist, techno-libertarian view of the world that emphasizes the benefits, the gains from AI and often underplays the downside scenarios. China thinks about this game somewhat differently. Under Chinese state-driven model, China is laser-focused on becoming the technological superpower. It is in many ways already, but that requires constant investment, including from the state.
ANU BRADFORD: But China is also deploying technology as a tool for surveillance and censorship and propaganda in an effort to entrench the political power of the Communist Party and ensure social stability within the nation. AI is a double-edged sword for the Chinese government. In many ways, it is a really powerful technology to maintain an invasive surveillance state. AI-powered facial recognition technology is a field that China dominates.
ANU BRADFORD: But AI can also undermine the government's censorship regime. If you let the ChatGPT types of technologies to produce the content that they want, China needs to ensure that content gets filtered through what is politically acceptable. What about the Europeans? So the Europeans are often described as being forced to choose between the Chinese model and the American model, lacking a robust technology industry on their own.
ANU BRADFORD: But I don't think the Europeans can make that choice, nor are they forced to make that choice. The Chinese model for the Europeans is too oppressive, but the American model is too permissive. That's why the Europeans have charted their own third way, what I call the rights-driven regulatory model that emphasizes the fundamental rights of individuals, the preservation of the democratic structures of the society, and a more fair distribution of the gains from digital transformation, including artificial intelligence.
ANU BRADFORD: So it takes a very human-centric view of governing artificial intelligence. So these three technology or regulatory powers are powers that I call empires, digital empires. And I do that because none of these three are prepared to confine their regulatory models only to their own jurisdiction. They all want to export them around the world. But interestingly, they are all exporting something different.
ANU BRADFORD: America is mainly exporting the private power of its tech companies. These tech companies were set free to take over the world, and that is exactly what they have done. Companies like Meta's Facebook is present in 200 countries almost. It has 3 billion users. It's part of the American digital empire, and those companies are harvesting the data from all around the world that they can use then to train their AI models, and that has given a tremendous advantage to the United States in the AI race.
ANU BRADFORD: China is primarily exporting what I call infrastructure power. China is building 5 grams networks, data centers, undersea cables, exporting surveillance technologies by constructing smart cities and safe cities along the Digital Silk Road that reaches across Asia, Latin America, Africa, and parts of Europe. And by building these digital backbones of societies, those societies are made compatible with future Chinese technologies, and that allows China to export its digital authoritarian model.
ANU BRADFORD: What about the Europeans? What are the Europeans exporting? Well, they are exporting the only power they have, which is regulation. It sometimes takes me a while if I ask a room full of people to name a European tech company, but they are very quick to name the GDPR. The Europeans are more famous for regulating than developing technologies, and they have managed to often regulate the global marketplace through this phenomenon that I call the Brussels effect.
ANU BRADFORD: The EU is one of the largest and wealthiest consumer markets in the world, and there are very few global companies that can't afford not to trade in the EU. And as the price for accessing the European market, they need to follow all the European regulations. That's not surprising. But often these companies choose that it is in their interest to extend that regulation across state global contact because they want to avoid the cost of complying with multiple different regulatory regimes.
ANU BRADFORD: That's why all the leading US tech companies use the GDPR as their global privacy policy. And now, the EU is trying to do the same with respect to the AI Act. Unsurprisingly, the EU was the first jurisdiction to enact the world's first binding comprehensive AI regulation, and now, the question is whether the others will follow and whether the companies that comply with the AI Act will also do so outside of the EU.
ANU BRADFORD: So if we now understand that there are different ways to think about AI regulation, we also know why there is no global AI treaty anywhere in the near future. The world of AI governance is very fragmented, and these different digital empires are all fighting for influence. But interestingly, that world is not being divided in three different spheres of influence because all these empires are exporting something different.
ANU BRADFORD: They are adding a different layer to the global digital governance. We have many markets around the world where you at the same time. See, US tech companies, Chinese digital infrastructure and European regulations governing that infrastructure and those companies. So the empires are coming into conflict. They are clashing.
ANU BRADFORD: And that leads to various battles, two kinds of battles. We see horizontal and vertical battles. Horizontal battles are the battles between the empires themselves. And vertical battles are battles between the governments on one hand and tech companies on the other. The most prominent horizontal battle is the tech war between the US and China. That is the battle for technological supremacy, economic supremacy, geopolitical and one day, even military supremacy.
ANU BRADFORD: And both are determined to win that race. And that is really shaping, more than anything, the environment within which we are thinking about global AI regulation. So many would say that the outcome, an inevitable outcome, is technological decoupling. That is the goal in many ways of this administration. But it's very hard to think full decoupling of today's integrated economy. Let me take Apple as an example.
ANU BRADFORD: Trump administration really wants Apple to bring its supply chain to the United States. What would that mean? Apple's iPhone, the most successful consumer device ever developed, Apple has sold about 2.8 billion of those. The newest models have 2,700 parts. Apple uses 187 suppliers in 28 different countries. About 5% of that supply chain today is in the United States.
ANU BRADFORD: And if Apple were to move 10% of its supply chain to the United States, it would cost $390 billion, and it would take three years, and iPhone would cost $3,500. I don't think that is going to happen, but the tech war will continue and an inevitable outcome, even if we don't see full see full decoupling is protectionism.
ANU BRADFORD: We will see export controls. We will see continuing investment restrictions, and we see subsidy races. And in many ways, the United States is playing Beijing's game. This is no longer about free market and the principles of the free market model. But that's not the only horizontal battle we are witnessing.
ANU BRADFORD: There's also a horizontal battle between the United States and the European Union, where the market-driven model and the rights-driven model are clashing. The Europeans are very upset. They feel that American tech companies are coming to Europe. They are taking too much, and they are giving too [AUDIO OUT], and they are striking back with their regulation, which makes the Americans very upset. This government says that, look, it's not our companies that are overreaching.
ANU BRADFORD: It's your regulators that are overreaching. And there have been efforts to come into some agreement on how for instance, manage data flows between the US and the EU. There was data agreement, Privacy Shield, that has been struck down repeatedly by the European courts, because the Europeans still don't trust that European data is safe in the United States. Europeans are also leading the vertical battles, going after pretty much all the leading US tech companies.
ANU BRADFORD: And that vertical battle is something that we saw China do with the crackdown of the tech sector. During President Biden, it seemed for a moment that the United States was also gearing up for those vertical battles, that they started to be some reassessment of whether the market-driven model ultimately was serving the American Society and the American consumers. The tech CEOs were hauled to Congress for testy the hearings.
ANU BRADFORD: Cases were brought against these tech companies, and bills proposed, even though very little actually has come out of Congress. But that has now changed. This is from the inauguration of President Trump. We see increasingly close alliance between the tech companies and this administration. So the US seems far less likely to join the Europeans in the vertical battle to fight the tech companies.
ANU BRADFORD: And one reason America is very hesitant to regulate these companies is that these vertical battles are fundamentally interlinked with those horizontal battles. If the US is to rein in its tech companies, it's going to weaken the very weapon it has in the horizontal battle against China. Remember, the US needs these companies to win the tech race. Talking about winning, who is then winning?
ANU BRADFORD: These regulatory battles. Are we going to see the world move towards the market driven-model, the state-driven model or the rights-driven model. Up until quite recently, I might have told you that this is Europe's hour. During the Biden administration, even Americans were losing faith in the market-driven model. Many countries were adopting a variation of the EU's market-driven model.
ANU BRADFORD: There were all these global meetings how to regulate artificial intelligence. There seemed to be a consensus that we need those guardrails, and the techno-democracies of the world were all endorsing the view that the Europeans had endorsed for quite a while. But there are a couple of challenges to the Europeans ability to declare any victory in this battle. One is that even though the Europeans have been very good at passing digital regulations, including the famous AI act, they have a hard time in actually enforcing these laws.
ANU BRADFORD: And here is one reason, these companies are tremendously powerful. This is a map from the time Apple's market cap was only $2 trillion. There are seven economies in the world that have a GDP that is larger than the market cap of Apple. Now, Apple is over $3 trillion. NVIDIA is $4 trillion. To give you an example, the GDPR, the most famous piece of European regulation, when that regulation entered into force, and the Irish agency that was put in charge of enforcement of that regulation against all those US tech companies that are headquartered in Ireland, like most of them are, the budget of the Irish regulator was $9 million.
ANU BRADFORD: That is what the US tech companies headquartered in Dublin make every 10 minutes. It is really hard to regulate these companies. Another challenge for the Europeans that the Brussels effect doesn't resonate in the authoritarian world, and that world is getting bigger every day. These countrie look at the Chinese state-driven model, and they like what they see.
ANU BRADFORD: And there are two reasons I'm going to give you why the Chinese model is doing so well, and why it is very difficult for the United States or for the European Union to persuade the countries that are emulating China not to do so. First, Chinese technology, that Digital Silk Road, it provides a path for digital development that these countries desperately need. Chinese technology is good, and it's affordable.
ANU BRADFORD: These countries cannot afford to say no, especially when they don't have an alternative. And another reason-- and this is a really painful one for me to say as a strong believer in democracy-- China has shown to the world that freedom is not necessary for innovation. China has created a thriving tech economy without being free. So it is very hard for us to go to all those developing countries to say that you follow the Chinese model, all you get is control.
ANU BRADFORD: You never see economic growth. They look at China and say, look, it seems that we can have both. And there's a lot of demand now when the world is moving more and more away from democracy to adopt the surveillance-based model that China has championed and can very effectively help you implement. So that is one big challenge for the European Union's model.
ANU BRADFORD: But it's also a bigger challenge for anybody who believes in liberal democracy because what I have just said seems to suggest that there is no effective liberal democratic way to govern technology. Americans cannot legislate in this space or are not willing to. The Europeans are willing to and they can legislate, but they have a hard time implementing the regulations.
ANU BRADFORD: China doesn't have a hard time implementing. If China says that it's time to crack down on big tech, I tell you, it is time to crack down on the big tech. These big tech companies are not dragging the Chinese government to independent courts, as they are doing in democracies and countries with different commitment to rule of law and independent courts. So it would be a challenge for liberal democracies to really show that there is a way that also they can govern technologies because otherwise, the inevitable conclusion is that the true digital empires are either the authoritarians, whereas Democratic governments are failing in that same endeavor or the tech companies themselves.
ANU BRADFORD: And neither is consistent with liberal democracy. Adding to the European challenges of being the proponent of the rights-driven model is the change in administration in the United States, where the US government now wants to rewrite the rules of European tech economy, because the narrative is that those rules are unfair and they discriminate against American innovative companies.
ANU BRADFORD: And that needs to stop if you ask our president, and the US is very effectively now roping these tech regulations into the broader trade war, threatening the Europeans with tariffs or the withdrawal of security guarantees. So the Europeans are starting to hesitate, and there's the question whether they can actually go ahead with that regulatory empire that they have built or whether they will be capitulating.
ANU BRADFORD: Europeans also feel very vulnerable because they realize now that the Europeans have a genuine issue of competitiveness. They cannot afford just to regulate. They need to develop these technologies. They need to de-risk themselves from China. But increasingly, there's a sentiment that they need to de-risk themselves from the United States.
ANU BRADFORD: And that means the Europeans need to prioritize growth, and not just this narrative around rights that has dominated the tech discourse recently. This is not pretty for the Europeans. This shows you the top 20 largest tech companies from a couple of years back. The blue bubbles are all American companies. Six alone are over $15 trillion in market cap. There are a couple of Asian companies, two European companies, SAP and ASML.
ANU BRADFORD: That is not great news for Europe. The gap between the US and EU is tremendous, and it is just widening. And Europeans have now become obsessed with this idea of technological sovereignty and how to reclaim control over their economies and defend their values. This now takes us to the question that I really want to invite you to think about-- is there really a choice that you either regulate or you innovate?
ANU BRADFORD: Is the reason the Europeans are so much behind the United States in producing leading AI companies the reason that the Europeans are just regulating? I don't think that is what is driving the outcome. There are much more fundamental reasons why there is this innovation gap between the US and the EU that shows that it is not European commitment to the rights-driven model, to AI Act, to the GDPR that is holding the Europeans back.
ANU BRADFORD: So let me offer you other reasons, which I think really are the more important comparisons between the US and the EU, that explain the current state of the AI race between the two. First, there is no digital single market in Europe. European AI companies need to try to scale across 27 different markets, with different languages, with different cultural expectations, and with different regulatory frameworks.
ANU BRADFORD: It was much easier for Amazon to start as an online bookseller in the United States, with pretty much uniform demand for English speaking books than to do the same in Europe. But it's also many regulations that keep the market so fragmented. Second is capital. Again, it's not the story of the GDPR or the AI Act. American companies benefit from tremendously vibrant capital market, from the depth of that capital market that does fuel their growth, and the Europeans don't have that.
ANU BRADFORD: European tech companies, including the AI startups, are mainly going to banks that are much more risk-averse in funding their innovations. They do pretty well in the first few funding rounds. But as soon as they need more money, they need to turn to American venture capital, or they need to be acquired by American tech Giants. Third, American attitudes versus European attitudes and legal frameworks, that determine whether you can assume risk as an entrepreneur.
ANU BRADFORD: Europeans have some of the most punitive bankruptcy laws in the world. You fail, you're done. You're not going to raise money again. Whereas one of the reasons Americans are generating these AI innovations is that the whole venture capital market is premised on this idea that we want you to do hard things, which means you are inevitably sometimes failing.
ANU BRADFORD: So as an American entrepreneur, you start your company, you go under, then you go and raise more money, and guess what? They give you more money because it seems like you're working on big things. Europeans also have a lot of stigma around failure. The idea that you really, it is embarrassing, whereas in the US. It's almost like the rite of passage. It's part of doing the business, and it's much more liberating for entrepreneurs.
ANU BRADFORD: Let me now turn to the final comparison between the two that I think is absolutely crucial. Americans have been so much more successful than Europeans, because this country has been able to harness the top talent from all around the world, and this has set Americans apart from China too. China has tremendously successful engineers, but Americans have been recruiting from the global pool of talent.
ANU BRADFORD: So over 50% of over $1 billion startups in the US have immigrant founders. If we think about for a moment, just the biggest household name tech companies and their founders-- Steve Jobs of Apple, son of a Syrian immigrant; Jeff Bezos, the founder of Amazon, second-generation Cuban; Elon Musk, the founder of Tesla and other companies, South African; Eduardo Saverin, the co-founder of Facebook, Brazilian; Sergey Brin, the co-founder of Google, Russian; Jensen Huang, the founder of NVIDIA, Taiwanese.
ANU BRADFORD: And I could go on. It's not because the Americans have chosen not to protect digital rights that they are doing great. It's because they have been adamant of building these other pillars of an effective, efficient tech system, including welcoming immigrants from all around the world to fuel the American tech economy. This is why the current move, when this administration is restricting the ability of immigrants to come to the country, is really self-defeating because it is undermining the very strength that has made this country so extremely successful.
ANU BRADFORD: So in many ways, I would say that this is now, for the Europeans, a Sputnik moment. Hopefully, they understand the stakes involved and really have the wake up call to say, what do we do that we don't just think about regulating AI, but we will also develop AI? And my message to the Europeans is you don't get there by scrapping the AI Act, by deciding that digital rights don't matter anymore.
ANU BRADFORD: The same message that I have always said in this town, if the United States were to adopt a federal privacy law, if there was a robust regulation of AI Act, that would not undermine the technological supremacy of this country. That wouldn't rewrite the bankruptcy laws. That wouldn't keep the immigrants from coming here. That wouldn't undermine the robust capital market. Those two are not alternatives.
ANU BRADFORD: They can be pursued at the same time. Let me now leave you with this. In many ways, we are at an inflection point where tech companies, governments, the organizations, individual users of technology are making very fundamental choices. Those choices have not yet been made, whether it's the market-driven model, the state-driven model, the rights-driven model that will prevail.
ANU BRADFORD: But those choices are in the process of being made, and I invite you all to be part of not just passive spectators when we are writing the rules for our digital future and charting the course for the AI revolution. But we really think about how we can have agency in shaping that revolution in a way that AI technology is something that we can harness the tremendous potential, while at the same time, making sure that technology serves us, our organizations, our societies, and never, never undermines us and our societies.
ANU BRADFORD: So let me leave it there, and I am happy to answer any questions that you may have. [APPLAUSE]
SPEAKER 1: All right.
SPEAKER 2: Got you.
TIM LLOYD: I'm Tim Lloyd from LibLynx. What is your advice for European governments then? Because they are beset by a lot of big problems right now.
ANU BRADFORD: Yeah, so for the European companies, in many ways, they need to stress the urgency to decision-makers. They alone cannot integrate the single market. They alone can't write the rules that will allow, for instance, pension funds to invest in risky venture capital. But they need to be proponents of that chase. And this is a political moment when I think the European regulators are hearing. They welcome the ideas.
ANU BRADFORD: There's an increasing sense of urgency and desperation that something needs to be done. So they need to make sure they seize the political moment. They are mainly now focusing on making sure that the regulations are not burdensome. That is part of the conversation. But also, these are the reforms that they need, but also issues like cultural attitudes towards risk taking that can be taken also at the organizational level that you empower your employees to take risks.
ANU BRADFORD: You do embrace failure. You share stories of failure, and you cultivate that attitude towards risk taking that would then allow your companies to really break new frontiers, and you send that signal very strongly. They also need to think about how they can harness global talent, whether you can have that talent immigrate or whether you find other ways to tap into that talent.
ANU BRADFORD: Right now, there's talent on the move to some extent from this country. There are many who say that if I can't have H-1B visas, where do I go? And there I think the European companies are critical in creating those pathways and making sure that once they get the go-ahead, they will integrate those employees. They will welcome the talent.
ANU BRADFORD: They will help the talent succeed. They build that ecosystem whereby the talent juices Europe as their next destination. So those are just some of the things that I would like to see European companies do.
SPEAKER 1: All right, we do have a question in the app. Do you have an opinion on which AI tech approach will win?
ANU BRADFORD: So in many ways, I think, I was predicting it looked like Europeans were doing very, very well. The Brussels effect really started to resonate in many parts of the world. If you look at, for instance, public opinion surveys, Americans share many concerns around technology. They do want more privacy. They want guardrails for AI. It seems to be one of the few bipartisan issues, including in this town, that China is a problem and big tech is a problem.
ANU BRADFORD: So there is a way that we could have even coalitions between the democrats and Republicans to regulate technology. So in many ways, I think, there was a momentum towards the European model. But right now, this politicization of technology is overshadowing everything the trade wars and tech wars are now so intense that they take most of the energy of just managing the everyday doing business in this uncertain environment.
ANU BRADFORD: It's not conducive, then, to try to think about how we regulate complexities around artificial intelligence. But in many ways, I think the Chinese model is actually winning here because when the US is retreating away from many of the international organizations that have been central for conversations around regulation, those organizations have less heft. China is now assuming a much stronger role in developing international coalitions around its preferred way of regulating.
ANU BRADFORD: And this whole idea, I think, I mentioned that in many ways, Americans are playing the Beijing's game is that everybody is getting more state-driven, and that is really a game that China has always played. And China knows how to play that game well. So the more this is around conflict, around geopolitics, the more the state is the central player and more that is then moving all of us towards a variation of the Chinese model.
ANU BRADFORD:
SPEAKER 3: I love this conversation. This is great. When you think about how much of technology is created in China, would you say they have an extra advantage in pushing their regulatory philosophies? They could simply cut off those pathways, the affordable pathways to technology for their competitors.
ANU BRADFORD: Yeah, in many ways, China has many advantages, partially by making the technology affordable. In AI, they are developing a lot of open-source models, which also then facilitates their global adoption. And China is very good about making sure that then if they build that fundamental digital infrastructure, they help you maintain it. They help you update it, and we make sure that any of those updates are always consistent with Chinese technology.
ANU BRADFORD: So there's a path dependency that they can create where all those roads lead to Beijing. It becomes then too expensive to rip the entire infrastructure and switch to an alternative provider. And for a moment, and this was very important for Biden administration, this idea that the US alone cannot stop, that it needs to work with the coalition of techno-democracies, normally referring to the United States, Europe, Japan, Korea, Australia, Canada, New Zealand, in some issues, India, Brazil.
ANU BRADFORD: But that coalition is now fracturing. And that is, again, an advantage that we collectively, as the West, is giving to China. There was recently a conversation and one of my favorite authors and scholars and expert on European policy and transatlantic relations, Oxford Professor Timothy Garton Ash. He made the comment to say the West as a geopolitical actor is over.
ANU BRADFORD: That doesn't exist anymore. So if you think about that statement and then how China can continue its laser focus in providing technology for its own market, but also for the rest of the world, it becomes harder to then slow down that progress.
SPEAKER 3: Thanks. So interesting talk, and it feels like we are a tiny little speck of dust with in these big machines that are moving in these models, and I just wonder, like, so as an industry, we're kind of scholarly research. We're kind of an IT industry. Do we have any chance of influencing any of these models in any way? Is there anything we can do that even has a chance of having any kind of effect on how this plays out?
SPEAKER 3: What is your advice around an industry like ours in order to have a kind of impact of any sort?
ANU BRADFORD: Yeah, so in many ways, you are the market. There's nothing if there's no demand. And you need to shape that demand. And collectively, it's very hard to think about as an individual that you are necessarily shaping this. But collectively, as an industry that is global in nature, can use voice. If you think about how much Axel Springer has actually changed some of the European regulation because it has very effectively articulated its goals.
ANU BRADFORD: So I absolutely believe that there are ways to influence this. One is that the tech companies' employees are already setting boundaries what are the technologies that they want to work on. So, for instance, the reason Google retreated from China is because Google employees said, we are not going to be working on a censored search engine. We are not going to be behind the search results that are going to be consistent with the ideology of the Communist Party.
ANU BRADFORD: And that was individual workers within this company. So they can also be coalitions between the markets the users of these technology that say these are the technologies we want and these are the technologies we don't want. And it's not going to be just publishing industry. There are many who actually have very strong views of what is their role in this digital economy. And I think ultimately, you need to really seize that role, as the user, as the consumer, without which you don't make money in this industry.
ANU BRADFORD: So in that sense, I would like to hopefully not leave you with the kind of sense of desperation that we are all spectators when this revolution is shaping its course, but ultimately, we are part of shaping what are the paths that course, then will take and how the AI revolution will unfold.
SPEAKER 1: We do have another question in the app-- is the EU taking a different approach than the US in enforcing IP or copyright ownership on the large AI companies?
ANU BRADFORD: Yes, so to some extent, the EU's response is fragmented. Also, in the copyright space, there's an EU level but also individual member state approaches to copyright. There's not as wide of a recognition of a concept of fair use. But the Europeans are very focused, and the AI Act does insist that the training of AI models need to be consistent with the copyright rules across the EU.
ANU BRADFORD: What that also means is that when there are exceptions, including the text mining, which would be a big European legal basis for using texts to train your models. You have the responsibility to ensure that you meet the conditions, including anybody who has opted out from that exception. You, as the one training the AI models, need to find out, need to know, or you can be responsible.
ANU BRADFORD: And that was also one of the three chapters, important chapters, that made it to this AI Code of Practice. Some of you who follow this more closely, which is now signed by all the leading US tech companies with the exception of Meta. That also contains-- now, they are opting in to complying with the copyright provisions of the EU's AI Act, and China also has in its law a requirement-- you cannot violate the copyright provisions.
ANU BRADFORD: So in that sense, to some extent, there's not a generous default assumption that fair use would be a starting point and assumption that guides the European approach.
SPEAKER 4: So you talked about how the EU has been able to take this regulatory approach because like with GDPR, it's just too complicated to have different policies in different parts of the world. Do you see the potential for individual states to be able to take that role within the US if the federal level is not going to legislate?
ANU BRADFORD: Absolutely, because that is what happened in privacy. So California decided to go ahead and has a very similar privacy law, some differences, but still based on many of the same assumptions that are underlying the GDPR, and that is now happening in the AI space as well. We have some states that are adamant to move ahead, and it was very interesting. One of the battles in Washington, in Congress was this idea that can you prevent the states from going on their own.
ANU BRADFORD: And there was very little political appetite because even some of the Republican lawmakers that are very adamant about not wanting regulation, they like state rights, and they don't like the idea that we would be tying the hands of these individual states. So I expect there to be more state level regulation. But this is also a concern then for tech companies. They don't like the fragmentation. They would prefer preemption at the federal level so that they at least would be a single framework as opposed to all these different frameworks.
ANU BRADFORD: So that may also generate the political push that we might be seeing some federal level legislation just because it's too fragmented of a space. There, the one question, though, is if there's a weak federal law that would preempt the state laws, that would be more robust and more protective. That can be a concern for some of the rights advocates.
SPEAKER 1: All right, I think we have time for one more question.
SPEAKER 4: Thank you so much for this talk. I had a big aha moment during the explanation of how China is fostering these coalitions to build infrastructure and route everyone back. I've spent a number of weeks in the summer meeting with European policymakers around science, policy, and China is doing the exact same. When you described it, I was like, oh, that's what they're doing. They're doing it with UNESCO.
SPEAKER 4: They're doing it with Science Europe. But when you speak to the policymakers privately, they'll say, China is pouring billions into this, but they're not telling us they're just doing whatever they want. And so my question is, are these coalitions truly a coalition of equals, or is it really the heavy weight is setting the agenda, and everyone's just having to go along with it?
ANU BRADFORD: So China's narrative is that these are much more coalitions of equals. The idea that the Washington Consensus, when the Europeans and Americans were writing the rules, that wasn't coalition of equals. That was really a form of imposition of the rules that were written by the West for the benefit of the West. So China said, we want to be the more empowering leader. We want to make sure we digitalize your economies. You will be part of the chains from the get-go.
ANU BRADFORD: But then what we also know with the Belt and Road Initiative, the infrastructure dimension of this digital belt and road where China has been building roads and bridges, is that there's also been many deals that have been very detrimental, and left developing companies are very indebted in many senses of the world to China. So there is also increasing criticism. They know that necessarily the Chinese infrastructure and these coalitions are not serving all their interests.
ANU BRADFORD: But right now, what are the alternatives? Europeans are very preoccupied managing the Trans-Atlantic trade and tech war. They don't really have much of those technologies to export. The US is mainly disengaging from international institutions and international diplomacy and not leading those global conversations. So the developing countries are left with China or nothing in many of these instances, and it's very hard to blame them for taking China and taking what they can get because, ultimately, you don't want to be a government that says that there is a path for us to digitalize and move forward, but I'm not taking it.
ANU BRADFORD:
SPEAKER 5: Thank you very much, Anu. Please join me in thanking her for an amazing talk. [APPLAUSE]
ANU BRADFORD: Thank you so much.
SPEAKER 5: And hopefully, by the end of the day, I've learned how to use a microphone. But we have reached the end of Platform Strategies, and I just want to do a few things before we go to the reception on the roof. The first is, I want to thank my incredible colleagues, including Stephanie Lovegrove Hansen, Sam, Evan, the whole team that put on this event today. Thank you. [APPLAUSE] We've had some incredible speakers today.
SPEAKER 5: So thank you to everyone for assuming positive intent and contributing generously. It was amazing to hear the level of insight and candor shared, particularly in the breakout sessions during the day. And if you haven't met somebody new still have one more chance up on the roof and liquid courage maybe will make a difference. Last but not least, I would like to thank our sponsors for the day today.
SPEAKER 5: We have a lot of friends that contribute to us convening, so that is our friends at Hum and Access Innovations and Digital Science and DCL. So thank you all very much. [APPLAUSE] So as we head back upstairs for cocktails, I just want to thank you for joining us again. I hope you got a lot out of the day.
SPEAKER 5: We will be asking for your feedback. Please share your thoughts with us, what you liked, what you didn't like, what you'd like to see next year. It really, really helps us. There are also copies of Anu's book on the table. Please grab one on your way out. They're provided for you, and I hope everyone has a lovely evening and stays dry.
SPEAKER 5: So thank you again, and hopefully, we'll see you next year. [APPLAUSE]
Segment:0 .
ANU BRADFORD: Excellent. Thank you so much, and good afternoon. What a terrific day you have had, and it's a real honor then to close it. So we look at the big picture of regulating artificial intelligence in today's geopolitical context. And before we talk about governing AI, we need to realize that there's not just a race to regulate. There's certainly a very intense race to develop these technologies, the AI race, and this feels like an existential race for many governments and the developers of these technologies.
ANU BRADFORD: This is the technology that is [INAUDIBLE] so much of our economy, that the rewards are tremendous if you win this race. Nobody wants to be left out when all these dividends are being distributed. We also know that this race feels even more existential because of the military, the geopolitical implications. AI is already central to today's warfare, and it will be even more central for modern warfare.
ANU BRADFORD: That makes the governments even more determined to be the first ones to win that race. So at the same time, when we talk about all these opportunities, we also realize that there are risks. Some of those are existential risks. We worry about our privacy. We worry about our democracy, about remaking our societies with increased inequality, unemployment if AI is replacing us as humans.
ANU BRADFORD: We also worry about catastrophic risks, risks to our humanity and civilization. So how do we then balance these risks and the opportunities? How do we think about governing AI. So there is no consensus on how to do that. And let me suggest that there are three primary ways about reorganizing the relationship between technology the markets, the state, and the individual.
ANU BRADFORD: There's the American market-driven regulatory model, the Chinese State-driven and the European, what I call, a rights-driven model. So the American market-driven model really wants to maximize free market, free internet, free speech, incentives to innovate. The governments are relegated to a trivial role, and the governance of technologies like AI is handy to the tech companies themselves.
ANU BRADFORD: So this is a techno-optimist, techno-libertarian view of the world that emphasizes the benefits, the gains from AI and often underplays the downside scenarios. China thinks about this game somewhat differently. Under Chinese state-driven model, China is laser-focused on becoming the technological superpower. It is in many ways already, but that requires constant investment, including from the state.
ANU BRADFORD: But China is also deploying technology as a tool for surveillance and censorship and propaganda in an effort to entrench the political power of the Communist Party and ensure social stability within the nation. AI is a double-edged sword for the Chinese government. In many ways, it is a really powerful technology to maintain an invasive surveillance state. AI-powered facial recognition technology is a field that China dominates.
ANU BRADFORD: But AI can also undermine the government's censorship regime. If you let the ChatGPT types of technologies to produce the content that they want, China needs to ensure that content gets filtered through what is politically acceptable. What about the Europeans? So the Europeans are often described as being forced to choose between the Chinese model and the American model, lacking a robust technology industry on their own.
ANU BRADFORD: But I don't think the Europeans can make that choice, nor are they forced to make that choice. The Chinese model for the Europeans is too oppressive, but the American model is too permissive. That's why the Europeans have charted their own third way, what I call the rights-driven regulatory model that emphasizes the fundamental rights of individuals, the preservation of the democratic structures of the society, and a more fair distribution of the gains from digital transformation, including artificial intelligence.
ANU BRADFORD: So it takes a very human-centric view of governing artificial intelligence. So these three technology or regulatory powers are powers that I call empires, digital empires. And I do that because none of these three are prepared to confine their regulatory models only to their own jurisdiction. They all want to export them around the world. But interestingly, they are all exporting something different.
ANU BRADFORD: America is mainly exporting the private power of its tech companies. These tech companies were set free to take over the world, and that is exactly what they have done. Companies like Meta's Facebook is present in 200 countries almost. It has 3 billion users. It's part of the American digital empire, and those companies are harvesting the data from all around the world that they can use then to train their AI models, and that has given a tremendous advantage to the United States in the AI race.
ANU BRADFORD: China is primarily exporting what I call infrastructure power. China is building 5 grams networks, data centers, undersea cables, exporting surveillance technologies by constructing smart cities and safe cities along the Digital Silk Road that reaches across Asia, Latin America, Africa, and parts of Europe. And by building these digital backbones of societies, those societies are made compatible with future Chinese technologies, and that allows China to export its digital authoritarian model.
ANU BRADFORD: What about the Europeans? What are the Europeans exporting? Well, they are exporting the only power they have, which is regulation. It sometimes takes me a while if I ask a room full of people to name a European tech company, but they are very quick to name the GDPR. The Europeans are more famous for regulating than developing technologies, and they have managed to often regulate the global marketplace through this phenomenon that I call the Brussels effect.
ANU BRADFORD: The EU is one of the largest and wealthiest consumer markets in the world, and there are very few global companies that can't afford not to trade in the EU. And as the price for accessing the European market, they need to follow all the European regulations. That's not surprising. But often these companies choose that it is in their interest to extend that regulation across state global contact because they want to avoid the cost of complying with multiple different regulatory regimes.
ANU BRADFORD: That's why all the leading US tech companies use the GDPR as their global privacy policy. And now, the EU is trying to do the same with respect to the AI Act. Unsurprisingly, the EU was the first jurisdiction to enact the world's first binding comprehensive AI regulation, and now, the question is whether the others will follow and whether the companies that comply with the AI Act will also do so outside of the EU.
ANU BRADFORD: So if we now understand that there are different ways to think about AI regulation, we also know why there is no global AI treaty anywhere in the near future. The world of AI governance is very fragmented, and these different digital empires are all fighting for influence. But interestingly, that world is not being divided in three different spheres of influence because all these empires are exporting something different.
ANU BRADFORD: They are adding a different layer to the global digital governance. We have many markets around the world where you at the same time. See, US tech companies, Chinese digital infrastructure and European regulations governing that infrastructure and those companies. So the empires are coming into conflict. They are clashing.
ANU BRADFORD: And that leads to various battles, two kinds of battles. We see horizontal and vertical battles. Horizontal battles are the battles between the empires themselves. And vertical battles are battles between the governments on one hand and tech companies on the other. The most prominent horizontal battle is the tech war between the US and China. That is the battle for technological supremacy, economic supremacy, geopolitical and one day, even military supremacy.
ANU BRADFORD: And both are determined to win that race. And that is really shaping, more than anything, the environment within which we are thinking about global AI regulation. So many would say that the outcome, an inevitable outcome, is technological decoupling. That is the goal in many ways of this administration. But it's very hard to think full decoupling of today's integrated economy. Let me take Apple as an example.
ANU BRADFORD: Trump administration really wants Apple to bring its supply chain to the United States. What would that mean? Apple's iPhone, the most successful consumer device ever developed, Apple has sold about 2.8 billion of those. The newest models have 2,700 parts. Apple uses 187 suppliers in 28 different countries. About 5% of that supply chain today is in the United States.
ANU BRADFORD: And if Apple were to move 10% of its supply chain to the United States, it would cost $390 billion, and it would take three years, and iPhone would cost $3,500. I don't think that is going to happen, but the tech war will continue and an inevitable outcome, even if we don't see full see full decoupling is protectionism.
ANU BRADFORD: We will see export controls. We will see continuing investment restrictions, and we see subsidy races. And in many ways, the United States is playing Beijing's game. This is no longer about free market and the principles of the free market model. But that's not the only horizontal battle we are witnessing.
ANU BRADFORD: There's also a horizontal battle between the United States and the European Union, where the market-driven model and the rights-driven model are clashing. The Europeans are very upset. They feel that American tech companies are coming to Europe. They are taking too much, and they are giving too [AUDIO OUT], and they are striking back with their regulation, which makes the Americans very upset. This government says that, look, it's not our companies that are overreaching.
ANU BRADFORD: It's your regulators that are overreaching. And there have been efforts to come into some agreement on how for instance, manage data flows between the US and the EU. There was data agreement, Privacy Shield, that has been struck down repeatedly by the European courts, because the Europeans still don't trust that European data is safe in the United States. Europeans are also leading the vertical battles, going after pretty much all the leading US tech companies.
ANU BRADFORD: And that vertical battle is something that we saw China do with the crackdown of the tech sector. During President Biden, it seemed for a moment that the United States was also gearing up for those vertical battles, that they started to be some reassessment of whether the market-driven model ultimately was serving the American Society and the American consumers. The tech CEOs were hauled to Congress for testy the hearings.
ANU BRADFORD: Cases were brought against these tech companies, and bills proposed, even though very little actually has come out of Congress. But that has now changed. This is from the inauguration of President Trump. We see increasingly close alliance between the tech companies and this administration. So the US seems far less likely to join the Europeans in the vertical battle to fight the tech companies.
ANU BRADFORD: And one reason America is very hesitant to regulate these companies is that these vertical battles are fundamentally interlinked with those horizontal battles. If the US is to rein in its tech companies, it's going to weaken the very weapon it has in the horizontal battle against China. Remember, the US needs these companies to win the tech race. Talking about winning, who is then winning?
ANU BRADFORD: These regulatory battles. Are we going to see the world move towards the market driven-model, the state-driven model or the rights-driven model. Up until quite recently, I might have told you that this is Europe's hour. During the Biden administration, even Americans were losing faith in the market-driven model. Many countries were adopting a variation of the EU's market-driven model.
ANU BRADFORD: There were all these global meetings how to regulate artificial intelligence. There seemed to be a consensus that we need those guardrails, and the techno-democracies of the world were all endorsing the view that the Europeans had endorsed for quite a while. But there are a couple of challenges to the Europeans ability to declare any victory in this battle. One is that even though the Europeans have been very good at passing digital regulations, including the famous AI act, they have a hard time in actually enforcing these laws.
ANU BRADFORD: And here is one reason, these companies are tremendously powerful. This is a map from the time Apple's market cap was only $2 trillion. There are seven economies in the world that have a GDP that is larger than the market cap of Apple. Now, Apple is over $3 trillion. NVIDIA is $4 trillion. To give you an example, the GDPR, the most famous piece of European regulation, when that regulation entered into force, and the Irish agency that was put in charge of enforcement of that regulation against all those US tech companies that are headquartered in Ireland, like most of them are, the budget of the Irish regulator was $9 million.
ANU BRADFORD: That is what the US tech companies headquartered in Dublin make every 10 minutes. It is really hard to regulate these companies. Another challenge for the Europeans that the Brussels effect doesn't resonate in the authoritarian world, and that world is getting bigger every day. These countrie look at the Chinese state-driven model, and they like what they see.
ANU BRADFORD: And there are two reasons I'm going to give you why the Chinese model is doing so well, and why it is very difficult for the United States or for the European Union to persuade the countries that are emulating China not to do so. First, Chinese technology, that Digital Silk Road, it provides a path for digital development that these countries desperately need. Chinese technology is good, and it's affordable.
ANU BRADFORD: These countries cannot afford to say no, especially when they don't have an alternative. And another reason-- and this is a really painful one for me to say as a strong believer in democracy-- China has shown to the world that freedom is not necessary for innovation. China has created a thriving tech economy without being free. So it is very hard for us to go to all those developing countries to say that you follow the Chinese model, all you get is control.
ANU BRADFORD: You never see economic growth. They look at China and say, look, it seems that we can have both. And there's a lot of demand now when the world is moving more and more away from democracy to adopt the surveillance-based model that China has championed and can very effectively help you implement. So that is one big challenge for the European Union's model.
ANU BRADFORD: But it's also a bigger challenge for anybody who believes in liberal democracy because what I have just said seems to suggest that there is no effective liberal democratic way to govern technology. Americans cannot legislate in this space or are not willing to. The Europeans are willing to and they can legislate, but they have a hard time implementing the regulations.
ANU BRADFORD: China doesn't have a hard time implementing. If China says that it's time to crack down on big tech, I tell you, it is time to crack down on the big tech. These big tech companies are not dragging the Chinese government to independent courts, as they are doing in democracies and countries with different commitment to rule of law and independent courts. So it would be a challenge for liberal democracies to really show that there is a way that also they can govern technologies because otherwise, the inevitable conclusion is that the true digital empires are either the authoritarians, whereas Democratic governments are failing in that same endeavor or the tech companies themselves.
ANU BRADFORD: And neither is consistent with liberal democracy. Adding to the European challenges of being the proponent of the rights-driven model is the change in administration in the United States, where the US government now wants to rewrite the rules of European tech economy, because the narrative is that those rules are unfair and they discriminate against American innovative companies.
ANU BRADFORD: And that needs to stop if you ask our president, and the US is very effectively now roping these tech regulations into the broader trade war, threatening the Europeans with tariffs or the withdrawal of security guarantees. So the Europeans are starting to hesitate, and there's the question whether they can actually go ahead with that regulatory empire that they have built or whether they will be capitulating.
ANU BRADFORD: Europeans also feel very vulnerable because they realize now that the Europeans have a genuine issue of competitiveness. They cannot afford just to regulate. They need to develop these technologies. They need to de-risk themselves from China. But increasingly, there's a sentiment that they need to de-risk themselves from the United States.
ANU BRADFORD: And that means the Europeans need to prioritize growth, and not just this narrative around rights that has dominated the tech discourse recently. This is not pretty for the Europeans. This shows you the top 20 largest tech companies from a couple of years back. The blue bubbles are all American companies. Six alone are over $15 trillion in market cap. There are a couple of Asian companies, two European companies, SAP and ASML.
ANU BRADFORD: That is not great news for Europe. The gap between the US and EU is tremendous, and it is just widening. And Europeans have now become obsessed with this idea of technological sovereignty and how to reclaim control over their economies and defend their values. This now takes us to the question that I really want to invite you to think about-- is there really a choice that you either regulate or you innovate?
ANU BRADFORD: Is the reason the Europeans are so much behind the United States in producing leading AI companies the reason that the Europeans are just regulating? I don't think that is what is driving the outcome. There are much more fundamental reasons why there is this innovation gap between the US and the EU that shows that it is not European commitment to the rights-driven model, to AI Act, to the GDPR that is holding the Europeans back.
ANU BRADFORD: So let me offer you other reasons, which I think really are the more important comparisons between the US and the EU, that explain the current state of the AI race between the two. First, there is no digital single market in Europe. European AI companies need to try to scale across 27 different markets, with different languages, with different cultural expectations, and with different regulatory frameworks.
ANU BRADFORD: It was much easier for Amazon to start as an online bookseller in the United States, with pretty much uniform demand for English speaking books than to do the same in Europe. But it's also many regulations that keep the market so fragmented. Second is capital. Again, it's not the story of the GDPR or the AI Act. American companies benefit from tremendously vibrant capital market, from the depth of that capital market that does fuel their growth, and the Europeans don't have that.
ANU BRADFORD: European tech companies, including the AI startups, are mainly going to banks that are much more risk-averse in funding their innovations. They do pretty well in the first few funding rounds. But as soon as they need more money, they need to turn to American venture capital, or they need to be acquired by American tech Giants. Third, American attitudes versus European attitudes and legal frameworks, that determine whether you can assume risk as an entrepreneur.
ANU BRADFORD: Europeans have some of the most punitive bankruptcy laws in the world. You fail, you're done. You're not going to raise money again. Whereas one of the reasons Americans are generating these AI innovations is that the whole venture capital market is premised on this idea that we want you to do hard things, which means you are inevitably sometimes failing.
ANU BRADFORD: So as an American entrepreneur, you start your company, you go under, then you go and raise more money, and guess what? They give you more money because it seems like you're working on big things. Europeans also have a lot of stigma around failure. The idea that you really, it is embarrassing, whereas in the US. It's almost like the rite of passage. It's part of doing the business, and it's much more liberating for entrepreneurs.
ANU BRADFORD: Let me now turn to the final comparison between the two that I think is absolutely crucial. Americans have been so much more successful than Europeans, because this country has been able to harness the top talent from all around the world, and this has set Americans apart from China too. China has tremendously successful engineers, but Americans have been recruiting from the global pool of talent.
ANU BRADFORD: So over 50% of over $1 billion startups in the US have immigrant founders. If we think about for a moment, just the biggest household name tech companies and their founders-- Steve Jobs of Apple, son of a Syrian immigrant; Jeff Bezos, the founder of Amazon, second-generation Cuban; Elon Musk, the founder of Tesla and other companies, South African; Eduardo Saverin, the co-founder of Facebook, Brazilian; Sergey Brin, the co-founder of Google, Russian; Jensen Huang, the founder of NVIDIA, Taiwanese.
ANU BRADFORD: And I could go on. It's not because the Americans have chosen not to protect digital rights that they are doing great. It's because they have been adamant of building these other pillars of an effective, efficient tech system, including welcoming immigrants from all around the world to fuel the American tech economy. This is why the current move, when this administration is restricting the ability of immigrants to come to the country, is really self-defeating because it is undermining the very strength that has made this country so extremely successful.
ANU BRADFORD: So in many ways, I would say that this is now, for the Europeans, a Sputnik moment. Hopefully, they understand the stakes involved and really have the wake up call to say, what do we do that we don't just think about regulating AI, but we will also develop AI? And my message to the Europeans is you don't get there by scrapping the AI Act, by deciding that digital rights don't matter anymore.
ANU BRADFORD: The same message that I have always said in this town, if the United States were to adopt a federal privacy law, if there was a robust regulation of AI Act, that would not undermine the technological supremacy of this country. That wouldn't rewrite the bankruptcy laws. That wouldn't keep the immigrants from coming here. That wouldn't undermine the robust capital market. Those two are not alternatives.
ANU BRADFORD: They can be pursued at the same time. Let me now leave you with this. In many ways, we are at an inflection point where tech companies, governments, the organizations, individual users of technology are making very fundamental choices. Those choices have not yet been made, whether it's the market-driven model, the state-driven model, the rights-driven model that will prevail.
ANU BRADFORD: But those choices are in the process of being made, and I invite you all to be part of not just passive spectators when we are writing the rules for our digital future and charting the course for the AI revolution. But we really think about how we can have agency in shaping that revolution in a way that AI technology is something that we can harness the tremendous potential, while at the same time, making sure that technology serves us, our organizations, our societies, and never, never undermines us and our societies.
ANU BRADFORD: So let me leave it there, and I am happy to answer any questions that you may have. [APPLAUSE]
SPEAKER 1: All right.
SPEAKER 2: Got you.
TIM LLOYD: I'm Tim Lloyd from LibLynx. What is your advice for European governments then? Because they are beset by a lot of big problems right now.
ANU BRADFORD: Yeah, so for the European companies, in many ways, they need to stress the urgency to decision-makers. They alone cannot integrate the single market. They alone can't write the rules that will allow, for instance, pension funds to invest in risky venture capital. But they need to be proponents of that chase. And this is a political moment when I think the European regulators are hearing. They welcome the ideas.
ANU BRADFORD: There's an increasing sense of urgency and desperation that something needs to be done. So they need to make sure they seize the political moment. They are mainly now focusing on making sure that the regulations are not burdensome. That is part of the conversation. But also, these are the reforms that they need, but also issues like cultural attitudes towards risk taking that can be taken also at the organizational level that you empower your employees to take risks.
ANU BRADFORD: You do embrace failure. You share stories of failure, and you cultivate that attitude towards risk taking that would then allow your companies to really break new frontiers, and you send that signal very strongly. They also need to think about how they can harness global talent, whether you can have that talent immigrate or whether you find other ways to tap into that talent.
ANU BRADFORD: Right now, there's talent on the move to some extent from this country. There are many who say that if I can't have H-1B visas, where do I go? And there I think the European companies are critical in creating those pathways and making sure that once they get the go-ahead, they will integrate those employees. They will welcome the talent.
ANU BRADFORD: They will help the talent succeed. They build that ecosystem whereby the talent juices Europe as their next destination. So those are just some of the things that I would like to see European companies do.
SPEAKER 1: All right, we do have a question in the app. Do you have an opinion on which AI tech approach will win?
ANU BRADFORD: So in many ways, I think, I was predicting it looked like Europeans were doing very, very well. The Brussels effect really started to resonate in many parts of the world. If you look at, for instance, public opinion surveys, Americans share many concerns around technology. They do want more privacy. They want guardrails for AI. It seems to be one of the few bipartisan issues, including in this town, that China is a problem and big tech is a problem.
ANU BRADFORD: So there is a way that we could have even coalitions between the democrats and Republicans to regulate technology. So in many ways, I think, there was a momentum towards the European model. But right now, this politicization of technology is overshadowing everything the trade wars and tech wars are now so intense that they take most of the energy of just managing the everyday doing business in this uncertain environment.
ANU BRADFORD: It's not conducive, then, to try to think about how we regulate complexities around artificial intelligence. But in many ways, I think the Chinese model is actually winning here because when the US is retreating away from many of the international organizations that have been central for conversations around regulation, those organizations have less heft. China is now assuming a much stronger role in developing international coalitions around its preferred way of regulating.
ANU BRADFORD: And this whole idea, I think, I mentioned that in many ways, Americans are playing the Beijing's game is that everybody is getting more state-driven, and that is really a game that China has always played. And China knows how to play that game well. So the more this is around conflict, around geopolitics, the more the state is the central player and more that is then moving all of us towards a variation of the Chinese model.
ANU BRADFORD:
SPEAKER 3: I love this conversation. This is great. When you think about how much of technology is created in China, would you say they have an extra advantage in pushing their regulatory philosophies? They could simply cut off those pathways, the affordable pathways to technology for their competitors.
ANU BRADFORD: Yeah, in many ways, China has many advantages, partially by making the technology affordable. In AI, they are developing a lot of open-source models, which also then facilitates their global adoption. And China is very good about making sure that then if they build that fundamental digital infrastructure, they help you maintain it. They help you update it, and we make sure that any of those updates are always consistent with Chinese technology.
ANU BRADFORD: So there's a path dependency that they can create where all those roads lead to Beijing. It becomes then too expensive to rip the entire infrastructure and switch to an alternative provider. And for a moment, and this was very important for Biden administration, this idea that the US alone cannot stop, that it needs to work with the coalition of techno-democracies, normally referring to the United States, Europe, Japan, Korea, Australia, Canada, New Zealand, in some issues, India, Brazil.
ANU BRADFORD: But that coalition is now fracturing. And that is, again, an advantage that we collectively, as the West, is giving to China. There was recently a conversation and one of my favorite authors and scholars and expert on European policy and transatlantic relations, Oxford Professor Timothy Garton Ash. He made the comment to say the West as a geopolitical actor is over.
ANU BRADFORD: That doesn't exist anymore. So if you think about that statement and then how China can continue its laser focus in providing technology for its own market, but also for the rest of the world, it becomes harder to then slow down that progress.
SPEAKER 3: Thanks. So interesting talk, and it feels like we are a tiny little speck of dust with in these big machines that are moving in these models, and I just wonder, like, so as an industry, we're kind of scholarly research. We're kind of an IT industry. Do we have any chance of influencing any of these models in any way? Is there anything we can do that even has a chance of having any kind of effect on how this plays out?
SPEAKER 3: What is your advice around an industry like ours in order to have a kind of impact of any sort?
ANU BRADFORD: Yeah, so in many ways, you are the market. There's nothing if there's no demand. And you need to shape that demand. And collectively, it's very hard to think about as an individual that you are necessarily shaping this. But collectively, as an industry that is global in nature, can use voice. If you think about how much Axel Springer has actually changed some of the European regulation because it has very effectively articulated its goals.
ANU BRADFORD: So I absolutely believe that there are ways to influence this. One is that the tech companies' employees are already setting boundaries what are the technologies that they want to work on. So, for instance, the reason Google retreated from China is because Google employees said, we are not going to be working on a censored search engine. We are not going to be behind the search results that are going to be consistent with the ideology of the Communist Party.
ANU BRADFORD: And that was individual workers within this company. So they can also be coalitions between the markets the users of these technology that say these are the technologies we want and these are the technologies we don't want. And it's not going to be just publishing industry. There are many who actually have very strong views of what is their role in this digital economy. And I think ultimately, you need to really seize that role, as the user, as the consumer, without which you don't make money in this industry.
ANU BRADFORD: So in that sense, I would like to hopefully not leave you with the kind of sense of desperation that we are all spectators when this revolution is shaping its course, but ultimately, we are part of shaping what are the paths that course, then will take and how the AI revolution will unfold.
SPEAKER 1: We do have another question in the app-- is the EU taking a different approach than the US in enforcing IP or copyright ownership on the large AI companies?
ANU BRADFORD: Yes, so to some extent, the EU's response is fragmented. Also, in the copyright space, there's an EU level but also individual member state approaches to copyright. There's not as wide of a recognition of a concept of fair use. But the Europeans are very focused, and the AI Act does insist that the training of AI models need to be consistent with the copyright rules across the EU.
ANU BRADFORD: What that also means is that when there are exceptions, including the text mining, which would be a big European legal basis for using texts to train your models. You have the responsibility to ensure that you meet the conditions, including anybody who has opted out from that exception. You, as the one training the AI models, need to find out, need to know, or you can be responsible.
ANU BRADFORD: And that was also one of the three chapters, important chapters, that made it to this AI Code of Practice. Some of you who follow this more closely, which is now signed by all the leading US tech companies with the exception of Meta. That also contains-- now, they are opting in to complying with the copyright provisions of the EU's AI Act, and China also has in its law a requirement-- you cannot violate the copyright provisions.
ANU BRADFORD: So in that sense, to some extent, there's not a generous default assumption that fair use would be a starting point and assumption that guides the European approach.
SPEAKER 4: So you talked about how the EU has been able to take this regulatory approach because like with GDPR, it's just too complicated to have different policies in different parts of the world. Do you see the potential for individual states to be able to take that role within the US if the federal level is not going to legislate?
ANU BRADFORD: Absolutely, because that is what happened in privacy. So California decided to go ahead and has a very similar privacy law, some differences, but still based on many of the same assumptions that are underlying the GDPR, and that is now happening in the AI space as well. We have some states that are adamant to move ahead, and it was very interesting. One of the battles in Washington, in Congress was this idea that can you prevent the states from going on their own.
ANU BRADFORD: And there was very little political appetite because even some of the Republican lawmakers that are very adamant about not wanting regulation, they like state rights, and they don't like the idea that we would be tying the hands of these individual states. So I expect there to be more state level regulation. But this is also a concern then for tech companies. They don't like the fragmentation. They would prefer preemption at the federal level so that they at least would be a single framework as opposed to all these different frameworks.
ANU BRADFORD: So that may also generate the political push that we might be seeing some federal level legislation just because it's too fragmented of a space. There, the one question, though, is if there's a weak federal law that would preempt the state laws, that would be more robust and more protective. That can be a concern for some of the rights advocates.
SPEAKER 1: All right, I think we have time for one more question.
SPEAKER 4: Thank you so much for this talk. I had a big aha moment during the explanation of how China is fostering these coalitions to build infrastructure and route everyone back. I've spent a number of weeks in the summer meeting with European policymakers around science, policy, and China is doing the exact same. When you described it, I was like, oh, that's what they're doing. They're doing it with UNESCO.
SPEAKER 4: They're doing it with Science Europe. But when you speak to the policymakers privately, they'll say, China is pouring billions into this, but they're not telling us they're just doing whatever they want. And so my question is, are these coalitions truly a coalition of equals, or is it really the heavy weight is setting the agenda, and everyone's just having to go along with it?
ANU BRADFORD: So China's narrative is that these are much more coalitions of equals. The idea that the Washington Consensus, when the Europeans and Americans were writing the rules, that wasn't coalition of equals. That was really a form of imposition of the rules that were written by the West for the benefit of the West. So China said, we want to be the more empowering leader. We want to make sure we digitalize your economies. You will be part of the chains from the get-go.
ANU BRADFORD: But then what we also know with the Belt and Road Initiative, the infrastructure dimension of this digital belt and road where China has been building roads and bridges, is that there's also been many deals that have been very detrimental, and left developing companies are very indebted in many senses of the world to China. So there is also increasing criticism. They know that necessarily the Chinese infrastructure and these coalitions are not serving all their interests.
ANU BRADFORD: But right now, what are the alternatives? Europeans are very preoccupied managing the Trans-Atlantic trade and tech war. They don't really have much of those technologies to export. The US is mainly disengaging from international institutions and international diplomacy and not leading those global conversations. So the developing countries are left with China or nothing in many of these instances, and it's very hard to blame them for taking China and taking what they can get because, ultimately, you don't want to be a government that says that there is a path for us to digitalize and move forward, but I'm not taking it.
ANU BRADFORD:
SPEAKER 5: Thank you very much, Anu. Please join me in thanking her for an amazing talk. [APPLAUSE]
ANU BRADFORD: Thank you so much.
SPEAKER 5: And hopefully, by the end of the day, I've learned how to use a microphone. But we have reached the end of Platform Strategies, and I just want to do a few things before we go to the reception on the roof. The first is, I want to thank my incredible colleagues, including Stephanie Lovegrove Hansen, Sam, Evan, the whole team that put on this event today. Thank you. [APPLAUSE] We've had some incredible speakers today.
SPEAKER 5: So thank you to everyone for assuming positive intent and contributing generously. It was amazing to hear the level of insight and candor shared, particularly in the breakout sessions during the day. And if you haven't met somebody new still have one more chance up on the roof and liquid courage maybe will make a difference. Last but not least, I would like to thank our sponsors for the day today.
SPEAKER 5: We have a lot of friends that contribute to us convening, so that is our friends at Hum and Access Innovations and Digital Science and DCL. So thank you all very much. [APPLAUSE] So as we head back upstairs for cocktails, I just want to thank you for joining us again. I hope you got a lot out of the day.
SPEAKER 5: We will be asking for your feedback. Please share your thoughts with us, what you liked, what you didn't like, what you'd like to see next year. It really, really helps us. There are also copies of Anu's book on the table. Please grab one on your way out. They're provided for you, and I hope everyone has a lovely evening and stays dry.
SPEAKER 5: So thank you again, and hopefully, we'll see you next year. [APPLAUSE]
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