[STANCE] AI: Poland (and the EU) shoots itself in the foot

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The AI industry provides a huge development opportunity for Poland due to, among other things, a vast population of well-educated programmers. Unfortunately, the European Union is drafting a law that could deprive our country of this opportunity. We are talking about the proposed regulation of artificial intelligence under the AI Act. But not only that. The Polish legislator has also decided to put his hand in stifling AI development, proposing harmful regulations when implementing the Directive on Copyright in the Digital Single Market (DSM). The Warsaw Enterprise Institute’s stance is that it is too early to regulate artificial intelligence in a far-reaching way. The technology is still new, and premature regulation could simply kill it.

The dream of a Polish Silicon Valley should not remain a dream forever. In the era of Artificial Intelligence (AI) development, it is becoming more and more realistic. The development of this technology can only take place based on the world’s best computer specialists, and Poland is famous for such people. As economist Robert Kowalski points out in his analysis of “Counteracting the EU’s negative regulations for IT and labor markets,” ChatGPT was built by “Poles in exile in Silicon Valley.” However, developing a business in Silicon Valley based on the people employed there is costly, but – fortunately for us – as a result of technological advances and the popularization of remote work, it is no longer necessary. A country like Poland can successfully replace Silicon Valley. Many companies have already noticed this. We’re talking about corporations such as Amazon, Intel, NVIDIA, Google, and Microsoft, but there will be many more if the legal and tax environment for business in Poland finally improves. Legal stability plus a vast supply of brains to work with are ideal conditions for technology business development.

The problem, however, is new regulatory ideas. The planned regulation of Artificial Intelligence in the AI Act formula places substantial restrictions on which AI-based technologies can be developed based on categorizing AI solutions into risk categories ranging from minimal to acceptable. It is estimated that in the first five years after the regulation comes into effect, the European economy will lose about 31 billion euros as a result, with the most significant burden of implementation falling on the smallest companies. Given that another very costly regulation (ESG reporting) is being implemented in the EU at the same time [READ OUR REPORT IN POLISH], one can expect a sharp drop in investment and productivity rates and further stagnation in the level of innovation in European economies.

But the fact that the Internet and new technologies have become an object of particular concern and worry for officials in Brussels in recent years, and thus an overproduction of regulations, is only one face of the problem above. Another is the local fabrication of nation-states in the implementation of EU regulations. This implementation is inherently cascading in nature. One directive or regulation means changes in dozens of local laws. For example, implementing GDPR in Poland resulted in modifications to 162 laws. The problem is that officials can determine the means of this implementation, introducing unnecessary and usually harmful additional regulations.

In the context of the development of AI, the bill to implement the DSM Directive (on copyright in the digital single market) includes a provision that could strongly restrict or prevent the use of data and text mining to “create generative models of artificial intelligence.” As Zbigniew Okon, attorney at law, explains in the text “TDM, artificial intelligence and the draft amendment to copyright law,” “the process of machine learning of a neural network requires collecting training data, preprocessing it, converting it into a form understandable to the neural network, and then performing the relevant calculations.” If access to training data in Poland is obstructed, AI development companies will not consider our country a potential location for their operations.

The Warsaw Enterprise Institute’s stance is that technologies that are only at an early stage of development should be neither regulated nor should there be regulatory influence on the direction of that development. AI should be held within the framework of existing law, and possible regulations should be introduced only when the technology has reached a mature, commercialized dimension. Otherwise, the EU risks lagging behind, Poland will be deprived of development opportunities, and Europe’s regulatory momentum will benefit other continents.

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