1st US AI Executive Order Not Enough to Compete With China: Industry Leaders, Lawmakers

U.S. President Joe Biden hands Vice President Kamala Harris the pen he used to sign a new executive order regarding artificial intelligence during an event in the East Room of the White House in Washington on Oct. 30, 2023. Chip Somodevilla/Getty Images

President Joe Biden’s executive order, issued this week to address concerns about artificial intelligence (AI) risks, is seen as a step toward responsible AI development. However, some industry leaders and lawmakers argue that it falls short of addressing the Chinese competition that poses a challenge to the United States’s AI superiority.

While the move is an important step for ensuring that the United States stays ahead in AI innovation and can use this tool for good, “more work needs to be done,” one business leader said.

“The United States faces stiff competition from China in AI development. This competition is so fierce that it is unclear which nation will emerge as the global leader, raising significant security concerns for the United States and its allies,” said Tom Quaadman, executive vice president of the U.S. Chamber of Commerce’s (USCC) Technology Engagement Center, in a statement issued on Oct. 30.

“It is imperative for the United States to lead the effort to create a risk-based AI regulatory and policy framework that is reinforced by industry standards and promotes the safe and responsible development and use of this transformational technology. The Biden Administration’s AI Executive Order is a step towards achieving that goal, but more work needs to be done,” he added.

According to the White House, the executive order establishes new standards for AI safety and security, protects Americans’ privacy, promotes equity and civil rights, and advocates for consumers and workers. It also aims to promote innovation and competition while strengthening the United States’s leadership in this industry.

The order directs law enforcement agencies to establish testing standards and handle related chemical, biological, radiological, nuclear, and cyber threats, as well.

“To maintain its competitive advantage, the United States, and like-minded jurisdictions, such as the European Union, need to reach [an] agreement to resolve key legal challenges that currently impede industry growth,” according to the USCC’s AI Commission report.

“[The] U.S. must collaborate with key partners and allies to develop more sensible global governance frameworks that advance our common democratic goals and values,” the report reads.

The Biden administration’s order is the latest attempt to set rules around AI as its use spreads and provides hope for enhancing economic opportunities, boosting salaries, accelerating life science research at lower costs, and simplifying lives.

Crucial Phase

The United States is “at a pivotal moment with AI, and unilateral, one-size-fits-all regulations will not alleviate every concern and may ultimately hamper innovation,” said House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) in a statement.

“To win the future and beat China, it’s vital that America leads in developing and deploying artificial intelligence with our values built in,” she added.

Indeed, while the United States pioneered AI development, the country has been slow in regulating the technology. According to the think-tank Brookings, the United Kingdom, the European Union, and China have already surpassed the United States in moving toward a regulatory framework for AI.

In April 2021, for example, the European Commission was the first to propose a regulatory framework that aims to regulate AI systems based on the risk they pose to users. Different risk levels will determine the extent of regulation, the commission said, adding that the EU’s approach focuses on ensuring safety, transparency, and non-discrimination in AI systems while fostering innovation and responsible development.

In March this year, the UK government joined the tech-savvy region in outlining several key principles for its AI regulatory framework with the goal of capitalizing on the potential provided by the technology while also fostering public trust and guaranteeing its responsible development and use. Like the United States, the UK government also wants to cement its position as a global leader in AI by encouraging innovation, investment, and ethical practices, according to the UK’s Department for Science, Innovation, and Technology.

However, on July 13, China was the first to finalize rules on generative AI—the “Interim Measures for the Management of Generative Artificial Intelligence Services”—which came into effect on Aug. 15. The measures were jointly approved by seven major Chinese government agencies, including the Ministry of Science and Technology, the Ministry of Public Security, and the Cyberspace Administration of China, Beijing’s regulatory body for internet matters.

Why China Matters

Several factors have contributed to China’s increasing prominence in the global AI competition. Most notably, China allocates a significantly higher portion of its budget to AI development, particularly within the military sector. Government data research firm Govini revealed that the People’s Liberation Army, for example, dedicates 1 percent to 2 percent of its budget to AI. In contrast, the U.S. Department of Defense allocates 0.1 percent to 0.2 percent, it said.

Beyond budget allocations, China has made significant strides in various AI domains, including facial recognition, fintech, drones, 5G telecommunications, and strategic investments. In terms of AI research commitment, patent filings, and investments, China is not merely catching up with the United States; it is establishing itself as a formidable force shaping the future of AI.

For example, Chinese institutions reportedly filed 29,853 AI-related patents in 2022, nearly 80 percent more than the number of U.S. filings. In contrast, U.S. patent filings decreased by 5.5 percent during the same period. Regarding the output of influential AI research papers, reports indicate that China’s most-cited AI research papers are poised to overtake the United States by 2025.

According to the USCC, given that both research and use of AI-based systems are expanding exponentially, the next decade or two will see AI being used by nearly every industry and government department. Moreover, the effects on culture, the economy, and the safety of the nation will be far-reaching, it said.

“[Consequently] While this executive order is a great step forward, Congress will need to act to ensure governance of AI,” said Rep. Zoe Lofgren (D-Calif.), ranking member of the House Science, Space and Technology Committee, in a statement.

“Not only must Congress adequately fund our federal science agencies to be able to do the important research and standards development described in this executive order, but I believe Congress must consider further regulations to protect Americans against demonstrable harms from AI systems.”