Clifford Chance

Artificial intelligence (AI) was a key focus for US policymakers in February. The president's 2021 budget proposal asserts that meeting the challenges of "great power rivals" requires prioritizing AI and other industries of the future. The budget includes significant increases in nondefense AI research and development (R&D) spending, along with quantum computing R&D. Other areas of science R&D experienced cuts.

The White House Office of Science and Technology Policy (OSTP) released its first annual report on the American Artificial Intelligence Initiative, announced by the president in February 2019. Among other things, the report reaffirms the importance of removing barriers to AI innovation and posits that "The best way to counter authoritarian uses of AI is to make sure America and our international partners remain the global hubs of innovation, shaping the evolution of the technology consistent with our common values."

In an interview with Politico, Deputy Chief Technology Officer at the OSTP, Lynne Parker, publicly reaffirmed support for the OECD AI Principles.  Upon their original adoption in May 2019, US Chief Technology Officer Michael Kratsios stated that the OECD AI Principles call for "flexible, light-touch policy environments" that encourage AI innovation and noted that "a rush to impose onerous and duplicative regulations will only cede our competitive edge to authoritarian governments who do not share our same values" and would "stifle innovation and prevent emerging technologies from ever getting off the ground."

Following recommendations from the Defense Innovation Board, led by former Google CEO Eric Schmidt, the Department of Defense adopted a set of ethical principles governing the use of AI,  providing that such use generally should be responsible, equitable, traceable, reliable, and governable.

The Department of Commerce, Bureau of Industry and Security (BIS) designated certain software specially designed for training a Deep Convolutional Neural Network (a form of AI) to automate the analysis of geospatial imagery as subject to export controls."

The possible introduction of AI-assisted mandatory face scans for buyers of new phones in China as part of the country's real-name registration laws (article 8 here) shows the increasing power and relevance of AI and the different approaches countries are likely to take.

Japan and India are pushing forward with a project to cooperate in the area of digital infrastructure, part of the continuing race to set rules in the region.

The government in India is looking to introduce the country's first comprehensive legal privacy framework. The Personal Data Protection Bill 2019 in its current form has been criticised as "Orwellian" by BN Srikrishna, a retired Supreme Court Justice and the drafter of the first iteration of the bill in 2017, on the grounds that the government is exempted from many of its requirements, potentially allowing it considerable access to people's data.

Ride-hailing companies and city governments are developing a history of not getting on well. Whether it is safety standards, vetting of drivers, pollution, over-crowding or unhappy and usually undercut incumbents, ride-hailing app companies can be as challenging for city-halls as they are popular with customers.

Lagos in Nigeria has joined London, Paris and a range of other cities where ride-hailing apps are clashing with local governments. The Lagos State Government has banned companies including Gokada, MAX and Oride - all motorbike ride-hailing platforms - from Lagos' built up areas. But consumers want it and the sector brings investment and innovation to the local and national economy. How will the government and regulators respond?

The European Commission is consulting on a new data package and ideas on artificial intelligence. This is Europe's attempt to win back momentum and place the EU at the centre of massive technological changes.

On 19 February 2020, the European Commission issued three documents that will shape its digital agenda for the next five years: (1) a Communication entitled: "A European strategy for data", (2) a White Paper and public consultation on artificial intelligence entitled: "On Artificial Intelligence - A European approach to excellence and trust" and (3) a broader policy document entitled "Shaping Europe's Digital Future". 

The aim of the data strategy is to create a policy environment by 2030 with a true single European market for data where businesses have access to high quality pooled industrial data. New regulation will establish the framework for data governance, access and reuse of data between businesses, between businesses and government, and within public administrations. The Commission hopes that this will lead to more data being stored and processed in the EU. Sector specific "data spaces" will also be developed for instance in industrial manufacturing, mobility and health. Finally, the document notes that more needs to be done on the cloud to ensure better uptake and consistent application of EU rules.

The White Paper and public consultation on artificial intelligence includes proposals to try and build trust in new systems. The Commission notes that different rules and processes will be required for cases that are considered "high risk" such as in health, policing or transport which will require guarantees of human oversight, whereas lower risk AI applications may only require a voluntary labelling scheme if higher standards are applied. On facial recognition, the Commission is encouraging a debate around what circumstances, if any, might justify exceptions to the ban. The deadline for contributions is 19 May 2020.

The document entitled "Shaping Europe's Digital Future" is the roadmap for digital policy over the coming years, and an outline of envisaged regulation on platforms and ways to reduce the technology sector's carbon footprint. On data centres, the Communication notes that they "can and should become climate neutral by 2030."

In Germany, the governing Christian Democrat Union (CDU) published a position paper on "Germany's digital sovereignty security - Setting standards for secure 5G networks" arguing that all parts of Germany's network need to be subject to adequate security measures.

The UK government published its initial response to its nearly year-long public consultation on its Online Harms White Paper. The proposal introduces a new statutory duty of care on companies to monitor harmful content.  The government has suggested the UK communications watching, Ofcom, should act as the online harms regulator.  On 27 February, Ofcom's content director emphasised agreement with the government's focus on placing freedom of expression at the centre of its planned approach.

The UK National Security Council approved the National Cyber Security Centre Guidance on High Risk Vendors for 5G equipment on 28 January 2020. This has sparked considerable political controversy within the UK government which may result in additional guidance and regulatory reform in the coming months.

Saudi Arabia is looking to develop its economy beyond oil and four years into its "Vision 2030" programme, it looks like 2020 is going to be a busy year for the Kingdom as it becomes the first Middle East nation to hold the G20 Presidency.

At the MEFTECH conference held in Riyadh recently, the governor of the Saudi Arabia Monetary Authority highlighted the Kingdom's efforts to promote the digitalisation of financial services. The volume of non-cash transactions conducted in the Kingdom rose to 36.2% of the total – exceeding the Vision 2030 target for 2020 of 28%.

The Saudi National Centre for Artificial Intelligence is one example of a number of new institutions that have been established in the Kingdom under the umbrella of the Vision 2030 programme. Established in September 2018, the Authority will hold its inaugural conference on artificial intelligence in Riyadh on 30-31 March 2020.

The Vision 2030 programme emphasises that innovation should be accompanied by "strengthening of the governance of digital transformation", and the Kingdom's G-20 Presidency Agenda likewise stresses the need to address associated challenges. In particular, it restates the G20's 2018 commitment to reaching a global tax solution to digitalisation, and acknowledges that concerted effort will be required to address the entry of "Big Tech" in finance.

The Kingdom's efforts are not purely domestic. Saudi Arabia's sovereign wealth fund, the Public Investment Fund, announced in February that it plans to grow its staff from 700 to 1,000 employees by the end of 2020; news which follows PIF's announcement in 2019 that it plans to open an office in San Francisco. The PIF's decision to slash its exposure to Tesla Inc is a reminder of the Kingdom's vast holdings in overseas tech companies – the PIF's stake in Tesla was at the time valued at around $2.9 billion.