November 2023 Business Litigation Update

It seems axiomatic that, in general, regulation rarely keeps pace with innovation and technological advances. This is certainly true for artificial intelligence (AI). Developments in AI have been extraordinary over the past few years, and the technology has greatly outpaced any kind of existing regulations. It’s not surprising, then, that as AI’s use continues to accelerate, there are growing calls for regulations to be implemented.

In response, the Biden administration issued an executive order on AI regulation in October. According to the announcement on the White House website, the Order “establishes new standards for AI safety and security, protects Americans’ privacy, advances equity and civil rights, stands up for consumers and workers, [and] promotes innovation and competition ….”

Below are some key points from the Order that could have implications for business owners who are involved in the development of AI or utilize the technology.

• Safety and Security: Many calls for AI regulation concern the safe and secure use of this technology. To that end, the Order requires that AI developers share their safety test results and other critical information with the U.S. government. They must also develop standards, tools, and tests to help ensure that AI systems are safe, secure, and trustworthy. Developers will also be required to protect Americans from AI-enabled fraud and deception by establishing standards and best practices for detecting AI-generated content and authenticating official content.
• Privacy: Protecting privacy is a major concern when it comes to AI, and in this Order, the President calls on Congress to pass bipartisan data privacy legislation to protect all Americans, especially minors. The Order also prioritizes federal support for accelerating the development and use of privacy-preserving techniques and calls for the strengthening of privacy-preserving research and technologies and for the development of guidelines for federal agencies to evaluate the effectiveness of privacy-preserving techniques.
• Equity and Civil Rights: Given concerns about bias in areas such as housing and healthcare, the Order requires that landlords, Federal benefits programs, and federal contractors provide clear guidance to keep AI algorithms from being used to exacerbate discrimination. It also requires that algorithmic discrimination be addressed, and civil rights violations prosecuted.
• Supporting Workers: The use of AI in the workplace, especially when it comes to hiring, has been under scrutiny because of the potential for bias and discrimination. The Order directs the development of principles and best practices to mitigate the harms and maximize the benefits of AI for workers by addressing job displacement; labor standards; workplace equity, health, and safety; and data collection.

The Order addresses other issues as well, and it can be read in full here.

The President’s Executive Order will likely be the first of many regulatory advancements in this area, and the businesses that are either utilizing or developing this technology should remain fully up to speed on any developments as they occur to ensure compliance. We will continue to monitor this issue, and keep you informed as to any further developments.