Key Provisions of the Executive Order

The Executive Order seeks to regulate and stimulate AI through a great variety of measures. Key points include:

• Global Standards Development: A commitment to international collaboration in shaping global AI standards, fostering interoperability, and harmonizing practices.
• Global AI Ecosystem Establishment: Recognition of AI's interconnected development, promoting collaboration in AI research, development, and deployment between US entities and global partners.
• Critical Infrastructure Standards: Emphasis on cooperative efforts for setting AI application standards in critical infrastructure, underscoring its global significance.
• International Cooperation Acknowledgment: An explicit acknowledgment of the need for international collaboration in mitigating AI-related risks.
• Red-Teaming and Risk Management: Introduction of stress-testing AI programs for safety, particularly in national security and public safety projects, indicating a commitment to rigorous evaluation and transparency.

Impact on European Businesses

• Collaborative Opportunities: The executive order places a significant emphasis on fostering international collaboration to establish AI standards. European businesses should expect enhanced collaboration with US counterparts, particularly in AI research and development, shaping a unified AI ecosystem.
• Labor Market Shifts: The executive order suggests a potential shift in the demand for AI-proficient personnel globally. The US government's focus on expediting the recruitment of AI experts within its own ranks may set a precedent for similar initiatives in Europe, influencing talent acquisition strategies and human resource planning. But Europe has to act fast so as not to lose existing talent to the US.
• Ethical AI Development Emphasis: With a strong emphasis on AI safety, security, and trust, the executive order underscores the importance of ethical AI development. European businesses involved in AI should align their practices with these principles, enhancing transparency, accountability, and user protection in their AI systems. Proactively addressing these ethical considerations is crucial in adapting to evolving regulatory expectations.

EU Standards and Regulations: Responding to the US Directive

• Setting an International Benchmark: The US Executive Order serves as a global reference point, aligning with the EU's emphasis on safe, transparent, and ethical AI practices. With the preliminary agreement reached on the EU AI Act on 8 December 2023, European businesses should now prepare for changing expectations and strive for high ethical standards in AI.
• Addressing Human Rights and Discrimination: In line with the EU's focus, the directive urges AI development to adhere to human rights principles and actively combat biases and discrimination.

Summary and Outlook

The US Executive Order on AI is a bellwether for the global AI regulatory environment, significantly impacting European businesses. As the EU continues to refine its AI standards, with the latest development on 8 December 2023, when lengthy trilogue discussions resulted in a preliminary agreement on the AI Act, European companies must stay abreast of global trends and collaborations while maintaining a strong commitment to ethical AI principles.

Baker McKenzie is closely monitoring these developments and is poised to provide tailored guidance to ensure compliance with emerging AI regulations.