AI advisory: Why investors and Big Tech are upset
There is regulatory confusion over the ministry of electronics and information technology’s advisory for firms to get “explicit permission” from the Centre if applications based on “unreliable” AI models are opened for public access. Mint explains why.
1 What’s the advisory, and what triggered it?
Firms building AI models, large language models and generative AI applications should ensure their platforms don’t generate “unlawful content” that violates the IT Act of 2000. It asked firms to not “permit any bias or discrimination or threaten the integrity of the electoral process.” It said “undertesting/unreliable” models would need “explicit permission” of the Centre—and a ‘consent popup’ would be mandatory for such AI applications. The advisory was triggered by opinionated results from Google’s Gemini AI on Prime Minister Narendra Modi. So the Centre asked firms to take onus of such results—or get permission.
2 Why is this advisory challenging for firms?
Big Tech firms building apps on AI will need to label their models as “under testing”, which experts say is subjective and vaguely defined. Because AI models are constantly trained on ever-expanding datasets, models may remain under testing for a long time, thus leaving this open to interpretation. Experts say explicit government oversight may also restrict firms’ ability to freely offer cutting-edge AI tech to users, and could restrict how readily Indian users may access the newest applications based on OpenAI’s GPT, Meta’s Llama and Google’s Gemini. What this means for enterprise access to the latest AI tech is unclear.
3 Are only global firms being targeted here?
For now, yes. On 4 March, minister of state for IT Rajeev Chandrasekhar tweeted the advisory “is only for large platforms, and will not apply to startups”. He said it will act as an “insurance policy to platforms who can otherwise be sued by consumers”. The clarification came after startups said such regulation may affect their ability to build products on cutting-edge AI models.
4 Why has this raised concern globally?
Global investors and firms say the advisory may affect investments in homegrown AI ventures. Investors don’t like heavy regulations in a nascent field. India promises to be a multi-billion dollar market for global AI developers. But the regulatory environment has raised worries among global investors that innovation could be stifled due to a gap in the understanding of the core technology among policymakers. The Centre has reduced the burden on startups, but the enterprise impact remains to be seen.
5 Where does this leave tech firms in India?
The advisory also mandated the presence of a ‘permanent unique metadata’ on AI-modified or generated content to identify them across various online platforms—which could be operationally challenging. Noncompliance could attract penalties. An ‘action taken-cum-status report’ is to be submitted by all companies that fall under this ambit by 16 March. This leaves AI products in India under a regulatory limbo. Also, most earlystage AI products are based on global AI models.