PYMNTS MonitorEdge May 2024

How the UN AI Resolution Could Reshape Commerce

How the UN AI Resolution Could Reshape Commerce

The United Nations General Assembly greenlit Monday (July 1) a China-sponsored, United States-backed resolution on artificial intelligence, signaling a potential sea change in global AI regulation and commerce.

This cooperation between the two tech titans comes just months after a U.S.-led AI safety measure, highlighting the complex dance of collaboration and rivalry in the race to shape AI’s future.

The nonbinding resolution, which garnered support from over 140 sponsors, calls on wealthy nations to ensure equal opportunities for developing countries in AI use and benefits. It emphasizes the need for a “fair, open, inclusive and nondiscriminatory business environment” in AI development and deployment, potentially reshaping global trade dynamics in the tech sector.

“The resolution supports efforts to export U.S. AI technology to developing countries,” Ed Watal, founder and principal at Intellibus, told PYMNTS. “This can be thought of as a conduit to enable Chinese firms that need access to those technologies to get them through these other nations, provided they have operations in these developing countries.”

Bridging the AI Divide: Implications for Global Trade

The push for technological equity could have far-reaching implications for global trade patterns and economic relations in the AI sector. Observers suggest that the balance of power between rich and developing countries in AI may depend on rules that have yet to be set. The U.N. and groups like the World Digital Governance are creating guidelines covering policies, regulations, shared language, standards and ethics. How these rules are defined will affect which countries have AI development and use advantages.

“Policymakers need to make sure these regulations don’t strangle innovation,” SecurityPal founder and CEO Pukar Hamal told PYMNTS. “We need rules that protect the tech industry without suffocating its growth. We’re still in the early days of AI — the infrastructure, architecture and approaches are just getting started. We need to give innovation a chance to take root.”

Hamal emphasized the potential drawbacks of stringent rules, particularly for new entrants in the AI field.

“If regulations are too tight, incumbent companies will end up with a massive data advantage, leaving new startups out in the cold and unable to improve their products and services,” he said.

The resolution’s emphasis on a non-discriminatory business environment for AI development will likely affect international investment flows and market dynamics.

“A non-discriminatory business environment is an ideal condition for AI,” Watal said. “It allows the best talent in the world to collaborate speedily and effectively to produce the next generation of AI.”

He predicted shifts in global AI investment patterns.

“International investments will likely go to cities [or nations] that become the ‘AI Capital of the World,’” he said. “Organizations or locations that can position themselves as the ‘destination for AI’ will win this economic race.”

Watal even suggested a potential reshaping of the AI landscape.

“Silicon Valley is up for a challenge as the next AI destination may be an island with the greatest weather, beautiful oceans and villas where a handful of the smartest AI engineers live and reshape the world,” he said.

Geopolitical Tensions and Collaborative Efforts

Despite the collaborative nature of the U.N. resolution, geopolitical tensions continue to simmer beneath the surface. Chinese officials have criticized U.S. proposals to restrict investments in Chinese AI and semiconductor sectors, urging them to lift these perceived sanctions. The tension highlights the delicate balance between national security concerns and promoting open, global innovation in AI.

Hamal suggested a way forward for companies navigating this complex landscape.

“To stay competitive on the global stage, tech companies must focus on innovation and agility and tackle challenges like super alignment among AI systems,” he said. “Overly stringent regulations could chill the startup ecosystem, preventing new companies from entering the market and stifling the diversity of ideas that drive progress and address these challenges.”

As AI capabilities advance, the U.N.’s measures represent initial steps toward establishing a global framework for responsible AI development and use.

Hamal advised a proactive approach.

“Companies should bake compliance into their innovation processes from the start, developing technologies with built-in safeguards and ethical considerations,” he said. “Open dialogue with regulators can help shape more practical, effective rules.”

The long-term impacts on global trade, technological innovation and geopolitical dynamics remain to be seen. Still, it’s evident that the race to shape the future of AI — and, by extension, the future of global commerce — is intensifying on the world stage.

As Watal said, “While AI has a lot of promise, it still is nascent in its capabilities, applications, and real business or life impact at scale.”

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