Meet the guy chargeable for helping Meta, Google and Amazon prepare for brand new laws in Europe

When Gerard de Graaf moved from Europe to San Francisco almost a yr ago, his job had a really different feel to it.

De Graaf, a 30-year veteran of the European Commission, was tasked with resurrecting the EU office within the Bay Area. His title is senior envoy for digital to the U.S., and since September his major job has been to assist the tech industry prepare for brand new laws called The Digital Services Act (DSA), which matches into effect Friday.

At the time of his arrival, the metaverse trumped artificial intelligence because the talk of the town, tech giants and emerging startups were cutting 1000’s of jobs, and the Nasdaq was headed for its worst yr because the financial crisis in 2008.

Within de Graaf’s purview, corporations including Meta, Google, Apple and Amazon have had since April to prepare for the DSA, which takes inspiration from banking regulations. They face fines of as much as 6% of annual revenue in the event that they fail to comply with the act, which was introduced in 2020 by the EC (the manager arm of the EU) to cut back the spread of illegal content online and supply more accountability.

Coming in as an envoy, de Graaf has seen more motion than he expected. In March, there was the sudden implosion of the long-lasting Silicon Valley Bank, the second-largest bank failure in U.S. history. At the identical time, OpenAI’s ChatGPT service, launched late last yr, was setting off an arms race in generative AI, with tech money pouring into recent chatbots and the massive language models (LLMs) powering them.

It was a “strange yr in lots of, some ways,” de Graaf said, from his office, which is co-located with the Irish Consulate on the twenty third floor of a constructing in downtown San Francisco. The European Union hasn’t had a proper presence in Silicon Valley because the Nineties.

De Graaf spent much of his time meeting with top executives, policy teams and technologists at the most important tech corporations to debate regulations, the impact of generative AI and competition. Although regulations are enforced by the EC in Brussels, the brand new outpost has been a useful strategy to foster a greater relationship between the U.S. tech sector and the EU, de Graaf said.

“I feel there’s been a conversation that we wanted to have that did probably not happen,” said de Graaf. With a touch of sarcasm, de Graaf said that any person with “infinite wisdom” decided the EU should step back from the region in the course of the web boom, right “when Silicon Valley was taking off and going from strength to strength.”

The pondering on the time inside the tech industry, he said, was that the web is a “different technology that moves very fast” and that “policymakers don’t understand it and may’t regulate it.”

However, some major leaders in tech have shown signs that they are taking the DSA seriously, de Graaf said. He noted that Meta CEO Mark Zuckerberg met with Thierry Breton, the EU commissioner for internal market, to go over a few of the specifics of the foundations, and that X owner Elon Musk has publicly supported the DSA after meeting with Breton.

De Graaf said he’s seeing “a bit more respect and understanding for the European Union’s position, and I feel that has accelerated after generative AI.”

X, formerly often called Twitter, had withdrawn from the EU’s voluntary guidelines for countering disinformation. There was no penalty for not participating, but X must now comply with the DSA, and Breton said after his meeting with Musk that “fighting disinformation might be a legal obligation.”

“I feel, normally, we have seen a serious commitment of massive corporations also in Europe and around the globe to be prepared and to organize themselves,” de Graaf said.

The recent rules require platforms with a minimum of 45 million monthly lively users within the EU to supply risk assessment and mitigation plans. They also must allow for certain researchers to have inspection access to their services for harms and supply more transparency to users about their suggestion systems, even allowing people to tweak their settings.

Timing may very well be a challenge. As a part of their cost-cutting measures implemented early this yr, many corporations laid off members of their trust and safety teams.

“You ask yourself the query, will these corporations still have the capability to implement these recent regulations?” de Graaf said. “We’ve been assured by lots of them that within the strategy of layoffs, they’ve a renewed sense of trust and safety.”

The DSA doesn’t require that tech corporations maintain a certain variety of trust and safety employees, de Graaf said, just that they comply with the law. Still, he said one social media platform that he declined to call gave a solution “that was not entirely reassuring” when asked the way it plans to observe for disinformation in Poland in the course of the upcoming October elections, as the corporate has just one person within the region.

That’s why the foundations include transparency about what precisely the platforms are doing.

“There’s lots we do not know, like how these corporations moderate content,” de Graaf said. “And not only their resources, but additionally how their decisions are made with which content will stay and which content is taken down.”

De Graaf, a Dutchman who’s married with two kids, has spent the past three many years going deep on regulatory issues for the EC. He previously worked on the Digital Services Act and Digital Markets Act, European laws targeted at consumer protection and rights and enhancing competition.

This is not his first stint within the U.S. From 1997 to 2001, he worked in Washington, D.C., as “trade counsellor on the European Commission’s Delegation to the United States,” in line with his bio.

For all of the speak about San Francisco’s “doom loop,” de Graaf said he sees a distinct level of energy in town in addition to further south in Silicon Valley.

There’s still “a lot dynamism” in San Francisco, he said, adding that it’s stuffed with “such interesting people and objective folks that I find incredibly refreshing.”

“I meet very, very interesting people here in Silicon Valley and in San Francisco,” he said. “And it isn’t just the businesses which might be form of avant-garde because the people behind them, so the conversations you could have here with individuals are really rewarding.”

Generative AI was a virtually foreign concept when de Graaf arrived in San Francisco last September. Now, it’s concerning the only topic of conversation at tech conferences and cocktail parties.

The rise and rapid spread of generative AI has led to a lot of big tech corporations and high-profile executives calling for regulations, citing the technology’s potential influence on society and the economy. In June, the European Parliament cleared a serious step in passing the EU AI Act, which might represent the EU’s package of AI regulations. It’s still a great distance from becoming law.

De Graaf noted the irony within the industry’s attitude. Tech corporations which have for years criticized the EU for overly aggressive regulations at the moment are asking, “Why is it taking you so long?” de Graaf said.

“We will hopefully have an agreement on the text by the tip of this yr,” he said. “And then we all the time have these transitional periods where the industry needs to organize, and we want to organize. That is perhaps two years or a yr and a half.”

The rapidly changing landscape of generative AI makes it tricky for the EU to quickly formulate regulations.

“Six months ago, I feel our big concern was to legislate the handful of corporations — the extremely powerful, resource wealthy corporations — which might be going to dominate,” de Graaf said.

But as more powerful LLMs turn out to be available for people to make use of free of charge, the technology is spreading, making regulation tougher as it isn’t nearly coping with just a few big corporations. De Graaf has been meeting with local universities like Stanford to find out about transparency into the LLMs, how researchers can access the technology and what sort of data corporations could provide to lawmakers about their software.

One proposal being floated in Europe is the concept of publicly funded AI models, so control is not all within the hands of massive U.S. corporations.

“These are questions that policymakers within the U.S. and all around the globe are asking themselves,” de Graaf said. “We do not have a crystal ball where we will just predict every little thing that is happening.”

Even if there are methods to expand how AI models are developed, there’s little doubt about where the cash is flowing for processing power. Nvidia, which just reported blowout earnings for the most recent quarter and has seen its stock price triple in value this yr, is by far the leader in providing the form of chips needed to power generative AI systems.

“That company, they’ve a singular value proposition,” de Graaf said. “It’s unique not due to scale or a network effect, but because their technology is so advanced that it has no competition.”

He said that his team meets “quite usually” with Nvidia and its policy team and so they’ve been learning “how the semiconductor market is evolving.”

“That’s a useful source information for us, and in fact, where the technology goes,” de Graaf said. “They know where a number of the industries are stepping up and are on the ball or are going to maneuver more quickly than other industries.”

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