European Union flags fly outside the European Commission headquarters in Brussels
European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 1, 2023. Reuters

Companies deploying generative AI tools, such as ChatGPT, will have to disclose any copyrighted material used to develop their systems, according to an early EU agreement that could pave the way for the world's first comprehensive laws governing the technology.

The European Commission began drafting the AI Act nearly two years ago to regulate emerging artificial intelligence technology, which underwent a boom in investment and popularity following the release of OpenAI's AI-powered chatbot ChatGPT.

Members of the European Parliament agreed to push the draft through to the next stage, the trilogue, during which EU lawmakers and member states will thrash out the final details of the bill.

Under the proposals, AI tools will be classified according to their perceived risk level: from minimal through to limited, high, and unacceptable. Areas of concern could include biometric surveillance, spreading misinformation or discriminatory language.

While high-risk tools will not be banned, those using them will need to be highly transparent in their operations.

Companies deploying generative AI tools, such as ChatGPT or image generator Midjourney, will also have to disclose any copyrighted material used to develop their systems.

This provision was a late addition drawn up within the past two weeks, according to a source familiar with discussions. Some committee members initially proposed banning copyrighted material being used to train generative AI models altogether, the source said, but this was abandoned in favour of a transparency requirement.

"Against conservative wishes for more surveillance and leftist fantasies of over-regulation, parliament found a solid compromise that would regulate AI proportionately, protect citizens' rights, as well as foster innovation and boost the economy," said Svenja Hahn, a European Parliament deputy.

Macquarie analyst Fred Havemeyer said the EU's proposal was "tactful" rather than a "ban first, and ask questions later" approach proposed by some.

"The EU has been on the frontier of regulating AI technology," he told Reuters.

RACE TO MARKET

Microsoft-backed OpenAI provoked awe and anxiety around the world when it unveiled ChatGPT late last year. The chatbot became the fastest-growing consumer application in history, reaching 100 million monthly active users in a matter of weeks.

The ensuing race among tech companies to bring generative AI products to market concerned some onlookers, with Twitter-owner Elon Musk backing a proposal to halt development of such systems for six months.

Shortly after signing the letter, the Financial Times reported Musk was planning to launch his own startup to rival OpenAI.