The emergence and expansion of artificial intelligence (AI) technology has radically transformed business. Companies are increasingly relying on AI to improve workflows and cut costs. As AI continues to advance, though, the law still has quite a bit of catching up to do.
If you’re confused by the legal climate around AI use, you’re not alone. Read ahead for a guide on the legal implications of AI-based business solutions, from present status to what the future holds.
AI solutions to everyday business issues are growing at a rapid pace. Here’s a rundown of the existing state of AI and the role it plays in the business world today.
Organizations across industries are already using machine learning and automation to expedite a number of common tasks, saving time and money. Have you ever felt bogged down by a to-do list full of mundane or repetitive assignments? AI can take some of those responsibilities off your plate.
For instance, AI is making great strides in improving customer service tools. Automated chatbots can help answer simple inquiries and route complex requests to live agents. These agents will have full bandwidth to handle more involved questions since AI is overseeing the smaller ones.
HR teams are also employing AI software for everything from recruiting to employee engagement. AI-powered content creation tools are also saving team members time by writing simple emails so they can use their creative brainpower for bigger projects.
The capabilities of AI may be evolving at a rapid pace, but regulatory bodies everywhere have yet to keep up. There are currently no laws on the books dictating how organizations can or cannot use AI in everyday business practices. Braden Perry, partner and attorney at Kennyhertz Perry Law, asserted that, although we may be in uncharted territory now, legal change is unavoidable.
“The U.S. is one of the most regulated environments in the world, but the lack of AI regulations is striking, and regulations are inevitable with the pace of AI transformation and advancement,” he explained. “Thoughtful regulations for AI are needed to ensure that the development and deployment of AI systems are ethical, transparent and generally safe.”
In the meantime, federal legislators have issued general guidance around best practices for AI business use. The Biden administration released its “Blueprint for an AI Bill of Rights,” urging ethical approaches to AI that prioritize equity and privacy. Senate Majority Leader Chuck Schumer (D-NY) has also proposed a SAFE AI Innovation Framework, with similar goals of security and accountability. Furthermore, the National Institute of Standards and Technology has issued recommendations on AI risk management.
AI can benefit business owners in several ways, but it’s important to have safeguards in place to avoid its pitfalls. Perry said that future legislation will play an important role.
“AI has the potential to bring benefits, but it also poses significant risks, including the misuse of AI for malicious purposes,” he said. “Regulations can help address these risks by providing guidelines for the development and deployment of AI systems, including requirements for transparency, accountability and ethical considerations.”
While legislators have yet to enact AI regulations, businesses can reference White House and Congressional frameworks for guidance on best practices.
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If you want to predict the legal future of AI, the frameworks proposed by the White House and Sen. Schumer are good starting points. Of course, we don’t know exactly what tomorrow’s laws will prescribe. That said, it seems safe to assume that regulations will focus on diminishing AI’s negative impacts, as identified above. Martijn van Nieuwenhoven, owner of The Code Connectors, elaborated on what that might look like for several areas of concern.
“Laws will likely affect how AI is applied in marketing, content, data analysis and customer communication,” he said. “In marketing, transparency around data use in ads could limit personalization. For content, stricter copyright laws may impact AI creation. In data analysis, privacy laws may restrict usable info. For customer service, chatbots may need to disclose non-human status.”
The U.S. may see regulations enacted on the privacy front sooner than later. The American Data Privacy and Protection Act focuses on guarding Americans from improper data collection, including provisions on AI algorithmic ethics. The bill did not receive a vote in the last Congressional session but could be reintroduced in the 118th Congress.
The impact of AI regulations won’t just be felt locally. David Ciccarelli, CEO of Voices.com, emphasized the importance of thinking globally when preparing for potential legislation.
“Regulations are not geographically constrained,” he said. “We see Europe introducing the Artificial Intelligence Act, China putting forward its Administrative Measures for Generative Artificial Intelligence Services and even Canada proposing its Artificial Intelligence and Data Act. All these efforts indicate the global interest in putting boundaries around the ‘Wild West of AI.’ It’s prudent to stay informed and prepared for increased regulatory complexity and compliance costs as AI evolves.”
AI-related legislation may be inevitable, but the question of whether laws can keep up with technological advancements has yet to be answered. Perry believes that a delay on the legislative side could stall progress.
“With the rise of artificial intelligence and other automation, there is a tremendous potential benefit to these advancements but a risk of regulatory lag that could hinder development,” he commented. “Innovation moves much quicker than both regulators and companies can react; therefore, a nimble and adaptive system is necessary.”
If the law fails to meet this moment, it could create a problem for businesses. It’s important for lawmakers to strike a balance between protecting consumer rights and promoting technological innovation. In the meantime, organizations can take a thoughtful approach to their AI strategy now to avoid scrambling to comply once legislation is enacted.
Even if the law is taking its time, there are many ways companies can properly implement AI solutions, both to prevent legal action and to help your organization’s overall reputation. Michael Giannulis, partner at CopyMachines, offered a comprehensive example of how this might look.
“AI-powered content creation, when handled responsibly with human oversight, boosts marketing efforts while maintaining copyright compliance,” he stressed. “AI integration calls for robust data privacy measures and regular algorithm monitoring to rectify biases or discriminatory practices. These steps uphold company values, safeguard bottom lines and prepare for impending AI regulations.”
If your company stays proactive and prioritizes adding a human touch to machine learning solutions, you can stay legally compliant and retain your customers’ trust. Of course, if you still have questions, it can help to bring in the experts. Ciccarelli underscored the need for building the right team for successful AI implementation.
“Start with building a cross-functional AI ethics team,” he advised. “Include legal advisors, ethicists and domain experts. Their role should be to understand the potential impact of AI systems on different areas of your business, from marketing to data analysis, and recommend best practices.” This doesn’t end at your internal team, though. Ciccarelli elaborated further on how reputable AI suppliers are also key.
“Businesses should leverage trustworthy vendors and certified certifiers to ensure that their AI applications comply with existing and upcoming regulations. This not only helps with regulatory compliance, but also fosters customer trust – a crucial element in today’s data-driven business landscape.”
Some industries will be more affected by future regulations than others. If your organization is in healthcare, finance or any sector that handles sensitive data, regulations are likely to affect your business sooner than later.
AI business solutions are not without risk. In addition to the potential for legal liability, bad AI practices can also harm your business reputation. But avoiding the technology altogether could mean you miss out on important growth opportunities.
Take a proactive approach and seek expert opinions on ethical AI practices. The more you know about AI, the more likely you’ll stay compliant as legislators navigate the ever-changing AI business landscape.