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Europe’s proposed AI legislation may value its financial system $ 36 billion

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The German Aerospace Center (DLR) is one of the space agencies working on automated and AI farming techniques for the coming era of interplanetary human colonies.

DLR

LONDON – A new law to regulate artificial intelligence in Europe could cost the EU economy 31 billion euros ($ 36 billion) over the next five years, according to a report by the Washington Think Tanks Center for Data Innovation released on Sunday.

The Artificial Intelligence Act – a law proposed by the European Commission, the executive arm of the EU – will be the “most restrictive regulation of AI in the world,” according to the center.

“It will not only limit the development and use of AI in Europe, it will also impose significant costs on businesses and consumers in the EU,” the organization said in the report.

The Commission did not immediately respond to a CNBC request for comment.

The Center for Data Innovation argues that a small or medium-sized company with a turnover of 10 million euros would have compliance costs of up to 400,000 euros if it used a high-risk AI system. Such systems are defined by the Commission as those that could affect fundamental rights or human security.

“This designation encompasses a wide range of potential applications – from critical infrastructures to education and training – and subjects them to a number of requirements before companies can bring them to market,” the center said.

She argues that the “compliance burden” will cost European companies € 10.9 billion a year by 2025, or € 31 billion over the next five years.

“The Commission has repeatedly claimed that draft AI legislation will support growth and innovation in Europe’s digital economy, but realistic economic analysis suggests the reasoning is insincere at best,” said Ben Mueller, senior policy analyst at Center for Data Innovation and author of the report.

He added, “The bright outlook is largely based on opinions and buzzwords rather than logic and market data.”

AI is already being used to power products for Google, Apple and Facebook, but lawmakers in Europe are concerned about its impact.

While technology has the potential to be a good force in areas like health care and climate modeling, it could also be used in deadly autonomous weapons or give any person in a population a social “score”.

In the meantime, machines learning how to do tasks normally done by humans could potentially eliminate millions of jobs.

The Center for Data Innovation is part of the non-profit, non-partisan Information Technology and Innovation Foundation, supported by Amazon, Apple, Microsoft and NBCUniversal, the parent company of CNBC.

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