AI regulation: harnessing the benefits and mitigating the risks

AI regulation: harnessing the benefits and mitigating the risks

Frontier’s latest independent report, commissioned by the Department for Science, Innovation and Technology (DSIT), provides an analysis of the hypothetical options for an AI regulatory framework in the UK.

Insights from this work helped inform the government of the benefits and costs of potential interventions and were part of the evidence base in the latest DSIT white paper: A pro-innovation approach to AI regulation.

AI is a complex group of technologies that involves machines, particularly computer systems, simulating human intelligence processes. The importance of AI is rapidly growing, leading to conversations about the need for regulation. Governments around the world are grappling with how to harness the benefits AI can offer whilst mitigating the risks that AI poses.

It is widely recognised that AI technologies can provide economic and consumer benefits, such as increased productivity and higher product quality, but they might also cause harm to consumers. The complexity of AI technologies makes them hard to understand and creates difficulties in ensuring risks are accounted for and mitigated. The rapid growth of AI and its quick penetration into various sectors further increase the potential risks AI can pose to the economy and consumers.

Key findings of the report:

  • Our quantitative analysis shows that, while prohibition of high-risk AI is the main regulatory tool for preventing harm from AI systems, its impact on the value of the AI market is expected to be significantly larger if that prohibition would lead to unintended removal of low-risk AI.
  • Consumer trust has the potential to generate additional benefits and negate, to an extent, the costs AI regulation would have on the market.
  • Regulation should be targeted and very clear to avoid the potentially high costs incurred by non-AI firms developing AI products inhouse.
  • Regulatory asymmetry may cause trade frictions and have a further impact on the economy.

 Please click here to read the full report.

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