Importing European tech regulations will undermine New York's leadership in AI

Importing European tech regulations will undermine New York’s leadership in AI | Opinion

Posted by Admin November 29, 2024 Tech

3-minute read

Doug Kelly
| Special to the USA TODAY Network

Artificial intelligence is transforming industries, economies and global power dynamics. The race to lead in AI isn’t just about technological innovation — it’s about securing America’s economic future and national security. Yet, as the U.S. attempts to strengthen its competitive edge, some policymakers are eyeing European-style regulations that could stifle our progress and undermine our leadership.

America is the global leader, with New York as a key hub, in AI innovation today because we attract the best talent, foster a supportive environment for startups, and offer flexible policies that encourage growth. But adopting restrictive, compliance-driven regulations like those in the EU would cripple our ability to compete. It’s a risk we can’t afford to take.

The formula for U.S. AI leadership

AI thrives on three pillars: top talent, robust funding, and an innovation-friendly ecosystem. The U.S. excels in all three. American AI startups enjoy strong venture capital support, stock options that attract world-class talent and immigration policies increasingly tailored to welcome AI experts from around the world. These factors have allowed U.S. AI startups to consistently outpace their European counterparts in both employee growth and funding.

For example, a recent study found that U.S. generative AI startups founded in 2020 achieved 40% higher median employee growth rates than that of similar startups in Europe. This rapid growth boosts productivity and attracts larger investments, enabling them to scale quickly. As demand for AI talent grows, strengthening STEM education and fostering American innovation will be crucial to maintaining AI momentum and ensuring our workforce can meet the needs of this rapidly evolving sector.

Europe’s misstep; A cautionary tale

In contrast, Europe’s approach is a warning sign. Policies like the Digital Markets Act create a regulatory maze that makes it harder for startups to grow, stifling innovation. Stringent regulations around data use, transparency, and compliance can deter investment and push talent to look elsewhere for opportunities. The result? A widening gap between the U.S. and Europe in AI innovation and startup success.

The U.S. cannot afford to replicate these mistakes. Our ability to lead in diverse AI approaches — both closed and open-source — is not just about economic growth. It’s central to our national security and our ability to counter adversaries like China, which is leveraging technology to expand its global influence.

Why leadership in AI matters

AI is poised to revolutionize everything from military applications to cybersecurity. The country that leads in AI will wield substantial global influence. A recent survey found that 75% of voters in the U.S. and Europe believe Western nations should work together to counter technological threats posed by countries like China and Russia. While collaboration is essential, American leadership is imperative.

Unlike Europe’s restrictive regulatory approach, the U.S. legal environment gives companies the agility to innovate. If the U.S. were to adopt EU-style AI regulations, we’d be trading our competitive edge for a compliance-driven approach that could cripple our competitive edge, slow innovation and hand China a lasting unearned advantage.

New York’s AI momentum and America’s path forward

The stakes are particularly high in states like New York, where AI is already driving economic growth. From finance to healthcare, AI is transforming industries and creating new job opportunities, making New York a leading hub for AI job creation, second only to Silicon Valley. To sustain this momentum, we need a robust pipeline of skilled workers. Strengthening STEM education will be key to ensuring that New York — and the nation — can continue to lead in the AI race.

The stakes couldn’t be higher. A free and open internet, cutting-edge AI capabilities, and the economic benefits from technological leadership are all within reach — but only if we stay true to the principles that have fueled American innovation: limited regulation, support for risk-taking, and a commitment to leading, not following.

Policymakers across the country must stand firm against restrictive regulations and champion policies that protect and promote our competitive edge in AI. Our position as a global leader in innovation and by extension our national security depends on it.

Doug Kelly is CEO of the American Edge Project, an advocacy organization dedicated to advancing and protecting American leadership in technology and innovation.