China Laid Out Generative AI Rules

The Cyberspace Administration of China (CAC) released their “Interim Measures for the Management of Generative Artificial Intelligence Services“. Under these new regulations, firms must obtain a licence to provide generative AI services to the public and submit a security assessment if public opinion attributes or social mobilisation capabilities are used in the model. In China, generative AI providers must uphold the integrity of state power, safeguard national unity, preserve economic and social order, and ensure the development of products aligned with the country’s socialist values.

A key question about China’s regulatory strategy has been whether the rules may end up suppressing innovation in the AI industry. “The way China approaches AI regulation will likely be consistent with its approach to regulating other areas of prominent technology, such as the internet or social media, where it operates strict censorship to control the flow of information,” said Citi analysts to CNN last month. Regulators appear to be aware of the concerns. In the just-released guidelines, they stress the need to strike a balance between “development and security. China also urges platforms to “participate in the formulation of international rules and standards” related to generative AI, they said.

AI as a scientific and economic Phenomenon

The state “encourages the innovative use of generative AI in all industries and fields” and supports the development of “secure and trustworthy” chips, software, tools, computing power, and data sources, according to the document announcing the rules. In recent months, the service ChatGPT has exploded in popularity, and Chinese tech companies have been racing to release their own versions.

Still, the country is deeply committed to investing in AI across sectors. According to Forbes, China accounted for nearly one-fifth of global private investment funding in 2021, attracting USD 17 billion for AI start-ups. In research, China produced about one-third of both AI journal papers and AI citations worldwide in 2021. Researchers estimate that AI can create upwards of USD 600 billion in economic value annually for the country. The rules will now only apply to services that are available to the general public in China. Technology being developed in research institutions or intended for use by overseas users is exempt.