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Authored by: Edwarde Webre and Jenny Jin
The advent of ChatGPT made the already heated artificial intelligence (“AI”) sector even hotter in China. Companies and individuals have reacted to AI developments with mixed feelings. Some have embraced it, some are worried and some have even opposed it. The Cyberspace Administration of China (the “CAC”) has decided to regulate the industry sector. After releasing the Administrative Provisions on Deep Synthesis of Internet-based Information Services last December to particularly address the use of AI in providing internet-based information services, the CAC recently issued a more comprehensive set of draft regulations titled Administrative Measures on Generative Artificial Intelligence Services (the “Measures”) for public comment. A summary of the key points and developments under the Measures that may be worth considering are set out below.
Scope of Application
The Measures apply to research, development and utilization of generative AI products to provide services to the public within the PRC. This means the Measures will have extra-territorial effect which was not the case with previous AI-related regulations. Foreign companies using their AI products to provide services to the Chinese public will be subject to the Measures. They will have to take actions to comply with the Measures when developing any AI products that will be used in serving the Chinese public, or block the Chinese public from access to their AI products in order not to be covered by the Measures.
The Measures define Generative AI as technologies for generating text, pictures, sounds, videos, codes and other contents on the basis of algorithms, models or rules. Again, this expands the scope of application by including models and rules-based AI which was not covered under the previous AI-related regulations.
Under the Measures, companies engaged in provision of the generative AI products or services should fulfil the following major obligations:
Liabilities for Violations
Violations of the Measures will be punished according to the PRC Cyber Security Law, the PRC Data Security Law, the PRC Personal Information Protection Law and other relevant laws and regulations. In the absence of relevant provisions in the foregoing laws and regulations, violators may be given warning or circulation of criticism and/or ordered to make rectification within a prescribed period by the CAC. In case of failure to obey the rectification order or under serious circumstances, the violators may be ordered to cease or suspend provision of services by using their AI products and fined in an amount from RMB 10,000 to 100,000.
The Measures may be finalized and officially released soon as the proposed effective date contained in the Measures includes a reference to the year 2023. It is obvious that the PRC government wishes to regulate the AI sector, but striking the delicate balance between regulating it and supporting it will be a huge challenge. We expect a rapid expansion in the regulations impacting this sector. Deacons will consistently monitor the legislative developments in this area and provide updates to our clients. Please do not hesitate to contact us if you have any questions.
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