by Rebecca Keller
It seems that hardly a 24-hour news cycle passes without a story about the latest social media controversy. We worry about who has our information, who knows our buying habits or searching habits, and who may be turning that information into targeted ads for products or politicians. Calls for stricter control and protection of privacy and for greater transparency follow. Europe will implement a new set of privacy regulations later this month - the culmination of a yearslong negotiating process and a move that could ease the way for similar policies in the United States, however eventually. Individuals, meanwhile, may take their own steps to guard their data. The implications of that reaction could reverberate far beyond our laptops or smartphones. It will handicap the United States in the next leg of the technology race with China.Big Picture
Artificial intelligence is more than simply a disruptive technology. It is poised to become an anchor for the Fourth Industrial Revolution and to change the factors that contribute to economic growth. As AI develops at varying rates throughout the world, it will influence the global competition underway between the world's great powers.
More than a quarter-century after the fall of the Soviet Union, the world is slowly shifting away from a unipolar system. As the great powers compete for global influence, technology will become an increasingly important part of their struggle. The advent of disruptive technologies such as artificial intelligence stands to revolutionize the ways in which economies function by changing the weight of the factors that fuel economic growth. In several key sectors, China is quickly catching up to its closest competitor in technology, the United States. And in AI, it could soon gain an advantage.
Of the major contenders in the AI arena today, China places the least value on individual privacy, while the European Union places the most. The United States is somewhere in between, though recent events seem to be pushing the country toward more rigorous privacy policies. Since the scandal erupted over Cambridge Analytica's use of Facebook data to target political ads in the 2016 presidential election, outcry has been building in the United States among internet users who want greater control over their personal data. But AI runs on data. AI algorithms use robust sets of data to learn, honing their pattern recognition and predictive abilities. Much of that data comes from individuals.
Learning to Read Personal Data
Online platforms such as social media networks, retail sites, search engines and ride-hailing apps all collect vast amounts of data from their users. Facebook collects a total of nearly 200 billion data points in 98 categories. Amazon's virtual assistant, Alexa, tracks numerous aspects of its users' behavior. Medical databases and genealogy websites gather troves of health and genetic information, and the GPS on our smartphones can track our every move. Drawing on this wealth of data, AI applications could evolve that would revolutionize aspects of everyday life far beyond online shopping. The data could enable applications to track diseases and prevent or mitigate future outbreaks, to help solve cold criminal cases, to relieve traffic congestion, to better assess risk for insurers, or to increase the efficiency of electrical grids and decrease emissions. The potential productivity gains that these innovations offer, in turn, would boost global economic growth.
Using the wealth of data that online platforms collect, AI applications could evolve to revolutionize aspects of everyday life far beyond online shopping.
To reap the greatest benefit, however, developers can't use just any data. Quality is as important as quantity, and that means ensuring that data collection methods are free of inherent bias. Preselecting participants for a particular data set, for example, would introduce bias to it. Likewise, placing a higher value on privacy, as many countries in the West are doing today, could skew data toward certain economic classes. Not all internet users, after all, will have the resources to pay to use online platforms that better protect personal data or to make informed choices about their privacy.
Calls for greater transparency in data collection also will pose a challenge for AI developers in the West. The European Union's General Data Protection Regulation, effective May 25, will tighten restrictions on all companies that handle the data of EU citizens, many of which are headquartered in the United States. The new regulation may prove difficult to enforce in practice, but it will nevertheless force companies around the world to improve their data transparency. And though the United States is still in the best position to take economic advantage of the AI revolution, thanks to its regulatory environment, the growing cultural emphasis on privacy could hinder technological development over the next decade.
The Privacy Handicap
As a general rule, precautionary regulations pose a serious threat to technological progress. The European Union historically has been more proactive than reactive in regulating innovation, a tendency that has done its part in hampering the EU tech sector. The United States, on the other hand, traditionally has fallen into the category of permissionless innovator - that is, a country that allows technological innovations to develop freely before devising the regulations to govern them. This approach has facilitated its rise to the fore in the global tech scene. While the United States still leads the pack in AI, recent concerns about civil liberties could slow it down relative to other tech heavyweights, namely China. The public demands for transparency and privacy aren't going away anytime soon. Furthermore, as AI becomes more powerful, differential privacy - the ability to extract personal information without identifying its source - will become more difficult to preserve.
These are issues that China doesn't have to worry about yet. For the most part, Chinese citizens don't have the same sensitivity over matters of individual privacy as their counterparts in the West. And China is emerging as a permissionless innovator, like the United States. Chinese privacy protections are vague and give the state wide latitude to collect information for security purposes. As a result, its government and the companies working with it have more of the information they need to make their own AI push, which President Xi Jinping has highlighted as a key national priority. Chinese tech giants Baidu, Alibaba and Tencent are all heavily invested in AI and are working to gather as much data as possible to build their AI empire. Together, these factors could help China gain ground on its competition.
In the long run, however, privacy is likely to become a greater priority in China. Chinese corporations value privacy, despite their history of intellectual property violations against the West, and they will take pains to protect their innovations. In addition, the country's younger generations and growing middle class probably will have more of an interest in securing their personal information. A recent art exhibit in China displayed the online data of more than 300,000 individuals, indicating a growing awareness of internet privacy among the country's citizenry.
Even so, over the course of the next decade, the growing concern in the West over privacy could hobble the United States in the AI race. The push for stronger privacy protections may decrease the quality of the data U.S. tech companies use to train and test their AI applications. But the playing field may well even out again. As AI applications continue to improve, more people in the United States will come to recognize their wide-ranging benefits in daily life and in the economy. The value of privacy is constantly in flux; the modern-day notion of a "right to privacy" didn't take shape in the United States until the mid-20th century. In time, U.S. citizens may once again be willing to sacrifice their privacy in exchange for a better life.
"AI Makes Personal Privacy a Matter of National Strategy" is republished with permission of Stratfor.
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