The AI Act minus ChatGPT

Hey there, it’s Jillian in Brussels. The last mile in the EU’s AI rulemaking negotiations is perilous. But first...Three things you need to [View in browser]( [Bloomberg]( Hey there, it’s Jillian in Brussels. The last mile in the EU’s AI rulemaking negotiations is perilous. But first... Three things you need to know today: • Microsoft will offer [AI customer service for the blind]( • Meta challenged the [EU’s digital antitrust rules]( • San Francisco and Cruise [have a contentious relationship]( Get your act together The European Union has been developing rules for artificial intelligence since 2021. With that work well underway by the time ChatGPT debuted, the EU’s AI Act was poised to become the western world’s first set of mandatory boundaries for what was suddenly the hottest technology on the planet. Now it looks like those rules might not apply to ChatGPT, if they’re even adopted at all. EU institutions were in the last stage of negotiations on an agreement expected as soon as Dec. 6. That all changed after France and Germany said they didn’t want to add rules for foundation models, such as OpenAI Inc.’s GPTs. The nations are worried about overregulation cutting off Europe’s chances of creating a local rival to ChatGPT. Excluding foundation models is out of the question for parliament members, who walked out of a meeting in protest at the end of last week, according to officials who asked not to be identified because they weren’t authorized to discuss the incident. Euractiv first [reported]( the walkout. The dispute puts Europe at risk of falling behind in the race to regulate AI. It’s a prospect officials had never really considered. They had scoffed at other governments’ efforts: [The US’s initial guidelines]( were voluntary; the UK could only [muster a summit](. EU officials were confident they would be the first to implement something meaningful — until October. A small group of officials had pushed for a political agreement on the AI Act by the end of that month. The plan was designed in part to demonstrate at the UK’s AI summit that the EU was still leading on the issue. But other EU officials were alarmed by the haste. The deadline was impossible, they said privately, and some suggested the outstanding issues were still too big to pass by the end of the year. On Oct. 30 President Joe Biden emerged with a surprise [executive order]( that put the US ahead. Then the Group of Seven, of which the EU is a member, published its AI principles. And the UK’s summit was a surprising success. EU negotiators came to a verbal agreement at the end of October that included some rules for AI foundation models and additional rules for the biggest ones. Then came the walkout. Everyone is now waiting to see whether Germany and France are willing to engage. On Thursday a number of the negotiators and companies will be at an AI conference in Madrid where the debate will likely spill out in public. There could still be a breakthrough. The ends of negotiations are often dicey. But the recent events have shaken the confidence of many officials involved. The AI Act was supposed to be the model for how to regulate generative AI. Now the rulemaking effort could be derailed by it. —[Jillian Deutsch](mailto:jdeutsch24@bloomberg.net) The big story Cartels are using Snapchat and TikTok to lure people into [transporting migrants across the US-Mexico border](. One to watch [Watch the Bloomberg Technology analysis]( of the meeting between the presidents of China and the US. Get fully charged Clorox’s cyber chief left the company as it’s still [recovering from a hack](. Sequoia Capital’s Michael Moritz has spent more than $300 million on an [effort to reshape San Francisco](. 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