Wojciech Wiewiórowski, European Data Protection Officer, predicts a sour situation for US-based artificial intelligence (AI) companies that are currently under investigation for alleged GDPR breaches.
“The breakneck pace of development means that data protection regulators must be prepared for another scandal”Wiewiórowski told MIT’s Technology Review during a recent interview, citing the Cambridge Analytica scandal as a reference.
Wiewiórowski’s comments come after a tumultuous week for OpenAI, a leading AI company and creator of the popular GPT suite of products and services. The company’s suite of GPT services has been banned outright in Italy pending further information on its intent and its ability to comply with the GDPR, with similar actions pending in Ireland, France and Germany.
According to the data watchdog of the European Union (EU), OpenAI is currently between a rock and a hard place, from a legal point of view. As EU regulators try to crack down, US lawmakers could be eyeing the European prescription as a possible local model:
“The European approach is connected to the purpose for which you use the data. So when you change the purpose for which the data is used, and especially if you do it against the information you provide to people, you are breaking the law.”
Under this premise, for example, OpenAI could find itself unable to deploy and operate models like GPT-3.5 and GPT-4 due to how they are designed and trained. GDPR law requires that EU citizens be given the ability to opt out of data collection and, in the event that a system generates erroneous data, that those errors be corrected.
However, some experts believe that it will be virtually impossible for developers to adapt GPT and similar models of linguistic artificial intelligence to the GDPR regulations. One reason is that the data they are trained on is often mixed, making individual data points inseparable from one another.
Wiewiórowski is of the opinion, according to the Technology Review article, that this represents something of a worst-case scenario for companies like OpenAI, which allegedly rushed to roll out without a public plan to address privacy issues such as those regulated by the GDPR.
Citing a “big player in the tech market,” the data watchdog quipped that “the definition of hell is European law with US enforcement.”
OpenAI is facing several official investigations in Europe with deadlines looming—April 30 in Italy, June 11 in Germany—and it remains unclear how the company intends to address privacy concerns from regulators.
One more time, Users of products and services built on the GPT API and other large language models are somewhere in the middle, and at this time cannot be sure how much longer they will be legally available.
A full ban under the GDPR could have devastating consequences for Europeans who use LLMs to power their businesses and individual projects, especially in the financial technology market, where cryptocurrency exchanges, analysts and traders have embraced the new technology.
And, in the United States, where many of the most dominant cryptocurrency and blockchain companies are based, a similar ban could deal a heavy blow to the financial sector.
As recently as April 25, the Analysts at financial services firm JP Morgan Chase say at least half of the S&P 500’s gains this year have been driven by ChatGPT.
If the United States follows the European example and institutes privacy regulations in line with the GDPR, both the traditional and cryptocurrency markets could suffer massive disruption.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.