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Jan 2, 2019 | 09:30 GMT

6 mins read

Data Privacy and AI Ethics Stepped to the Fore in 2018

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Editor's Note

Data privacy took center stage in 2018. The European Union's General Data Protection Regulation went into effect, numerous Silicon Valley executives testified before Congress following Facebook's fall from grace and the tech race between China and the United States kicked into full gear. As artificial intelligence and the data sets that ground it become more and more ubiquitous, countries and regions will work to define standards and ethics surrounding not only personal data privacy but other uses of data and artificial intelligence as well. Much like access to raw materials before it, the acquisition and use of data have become a part of national strategy.

The development of artificial intelligence is spawning a race between the United States and China to become not only technologically dominant but to also determine who will set the global standards that will govern how and when new technologies should be used. In an On Geopolitics column published in October, Stratfor's Rebecca Keller examined the ethical questions at the heart of the ideological battle between existing Western-led norms and China's evolving digital authoritarianism:

The field of artificial intelligence will be one of the biggest areas where different players will be working to establish regulatory guardrails and answer ethical questions in the future. Science fiction writer Isaac Asimov wrote his influential laws of robotics in the first half of the 20th century, and reality is now catching up to fiction. Questions over the ethics of AI and its potential applications are numerous: What constitutes bias within the algorithms? Who owns data? What privacy measures should be employed? And just how much control should humans retain in applying AI-driven automation? For many of these questions, there is no easy answer. And in fact, as the great power competition between China and the United States ramps up, they prompt another question: Who is going to answer them?

"AI is a global force that demands your attention," Reva Goujon wrote in August in an On Geopolitics column titled "AI and the Return of Great Power Competition." The race to dominate AI development will be a defining feature of the rivalry between the United States and China, and as such, will define the 21st century:

The United States, for now, has the lead in AI development when it comes to hardware, research and development, and a dynamic commercial AI sector. China, by the sheer size of its population, has a much larger data pool, but is critically lagging behind the United States in semiconductor development. Beijing, however, is not lacking in motivation in its bid to overtake the United States as the premier global AI leader by 2030. And while that timeline may appear aggressive, China's ambitious development in AI in the coming years will be unfettered by the growing ethical, privacy and antitrust concerns occupying the West.

A chart showing how the United States and China stack up in AI development

Concerns about data protection and privacy form one of many ethical divides between China and the West. The European Union took a global lead on protecting the data privacy rights of individuals when its General Data Protection Regulation (GDPR) took effect May 25. Stratfor looked at what the new rules meant for companies in Europe and elsewhere:

The European Union recently released a road map plotting the future of artificial intelligence (AI) in the bloc. France is leading the charge, as well as promoting a start-up culture within the country itself. But an extensive study from the Center of Data Innovation indicates that the GDPR has the potential to delay or disrupt AI development in Europe. Data — corporate, personal and more — fuels AI, and the more the GDPR limits the sharing, repurposing and reusing of data, the higher the cost will be for various AI applications.

A graphic illustrating the European Union's struggle to create unicorn companies -- startups that reach a valuation of at least $1 billion.

Europe wants to bring its tech sector out from under the shadow of the United States and China. But the GDPR is entering a landscape in which regulations, linguistic and cultural divisions, and worries that foreign competitors are undermining local traditions all make it hard for Europe to keep pace with the advancing tech revolution. As Matthew Bey wrote in April in an On Geopolitics column titled "A Test of Europe's Artificial Intelligence":

In response to the steady foreign dominance in tech, the European Union has tried various legal and financial interventions. Several U.S. tech firms, including Apple, Google, Facebook and Amazon, have been embroiled in legal disputes over data privacy and personal data use with various European countries. In addition, the European Commission unveiled a new proposal in March to levy a 3 percent tax on digital companies based on where their users — not their headquarters — are located. The commission also proposed new ways to scrutinize prospective foreign acquisition deals in strategic sectors.

But these measures have done little to close the gap between European tech firms and their U.S. and Chinese competitors. The European IT sector's struggles highlight the difficulties the Continental bloc and its members will face in trying to challenge the dominance of tech juggernauts in the United States and, soon enough, in China.

Worries about the collection and commercial use of personal data are also prevalent in the United States. The California Consumer Privacy Act took effect at the start of last year, and several other U.S. states are also considering their own data privacy laws. When the collection of more data means better AI, and developing better AI has economic and national security implications, tighter privacy protections "could reverberate far beyond our laptops or smartphones," Rebecca Keller wrote in May in an On Geopolitics column, "AI Makes Personal Privacy a Matter of National Strategy":

While the United States still leads the pack in AI, recent concerns about civil liberties could slow it down relative to other tech heavyweights, namely China. The public demands for transparency and privacy aren't going away anytime soon. Furthermore, as AI becomes more powerful, differential privacy — the ability to extract personal information without identifying its source — will become more difficult to preserve.

A chart showing the rapid growth of Chinese research and development.

In time, the concept of privacy may change in China and the West as the costs and benefits of information technology become more apparent. Until then, the rules and ethical considerations surrounding data privacy and artificial intelligence will remain fronts in what has become a war of technological innovation as China pushes innovation to try to match and surpass the United States:

Given that the country's population exceeds 1.3 billion people — and that data privacy is a low priority for Beijing — China offers its AI companies a big leg-up over their U.S. competitors by giving them access to a huge pool of data. Furthermore, unlike the tightly controlled Soviet economy that hindered innovation, China's hybrid economy offers individuals and companies incentive to push the boundaries in tech development. The country's model of capitalism isn't one of control, though Western media often portray Chinese tech firms as dependent on Beijing to subsidize and direct their activities. Instead, the central government outlines areas in which it would like companies to operate and provides incentives to encourage competition. AI is one of those areas, and China's tech giants are eager to outpace one another in the field.

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