India’s Moment To Shine? US can’t regulate AI and NVIDIA has ensured it

The US was supposed to formulate regulations that would govern how AI is developed and implemented. Now though, with NVIDIA’s stock reaching a record valuation for a semiconductor company, mainly driven by AI, the chance for any meaningful regulation has gone out of the window. **Also read: AI sets NVIDIA on path to become first US chipmaker to be valued over $1 trillion** NVIDIA’s data centre GPUs play a crucial role in training and operating large AI systems. Moreover, the company’s investor call indicated that earnings were expected to continue accelerating in the second quarter. Since the beginning of the year, Nvidia’s stock has surged by over 160 per cent, establishing it as America’s newest trillion-dollar market cap company. This remarkable financial performance is likely to impede any regulatory efforts. What this essentially means is that instead of the US, it will have to be a new player that sets the rules for AI, and AI developers, about how AI is allowed to shape our lives, and more importantly, what it won’t be allowed to do. The situation, therefore, is a unique moment for India to shine and set the tone for one of the most vital technology, one that will be shaping the future, and quite possibly, humanity. Given that India has already done it once, by banning Chinese apps, especially ByteDance’s TikTok.

Underscores the importance of creating an Innovation Economy where new players can emerge disrupting incumbents resulting in immense economic value. India needs more risk tolerant investing in DeepTech Innovations placing long term technology bets. https://t.co/1nRlWOrd4F

— Shashi Shekhar Vempati शशि शेखर (@shashidigital) May 31, 2023

A Midas named AI: Anything AI equals money now AI has become a Midas of sorts - everything that it touches is now turning to gold. What this basically means is that no matter how ridiculous the implementation, or farfetched the subject, any company that is doing anything for or with AI expects to see their valuations go sky-high. Naturally then, in response to a setup that looks to maximise value over profit, over anything and everything else, the US financial market has adopted a strategy of allocating substantial funds to AI’s development. This approach tends to be most effective when dealing with problems that can be resolved through substantial financial resources. At present, AI stocks are the sole factor preventing a market downturn in the United States. Interest rates are inverted by more than a percentage point, the US is grappling with a debt limit crisis, job openings have declined by 25 per cent, and investors are turning to gold as a hedge against potential collapse. Simultaneously, they are investing in AI stocks to avoid the risk of being left behind. **Also read: AI tools a $90 billion market already, developers look for solutions better than OpenAI** The US financial markets, being the largest in the world, are specifically designed to generate profits by mobilizing substantial amounts of capital. When presented with a problem where the only obstacle between investors and potential profits is a significant investment, the market tends to go all-in. Why no US politician, Republican or Democrat can pass any meaningful regulation With the remarkable surge of around half a trillion dollars in AI-related stocks during the first half of 2023, it is evident that the market has the capacity to inject one to two trillion dollars into this sector on an ongoing basis. Given the enormous scale of annual market investments, no sensible politician would dare obstruct or impede such substantial financial inflows, as it could have detrimental consequences. In fact, politicians in the US would risk facing significant backlash or failure if they were to oppose these investments. Moreover, since politicians in the US are allowed to own stocks in companies and then vote in legislation that affects those companies, it is highly unlikely that any meaningful legislation that would have effectively reigned in AI will ever be passed, at least in the US To be fair, the possibility exists that the Republican Party could fully embrace AI regulation. However, a significant obstacle lies in the fact that the Republican Party predominantly represents white individuals with conservative leanings. Considering that the majority of wealth in the market is held by white people, it is unlikely that the Republican Party would willingly impose regulations on the thriving sector of the stock market. Democrats, on the other hand, might opt to engage in a regulatory battle, but in typical Democrat fashion, they will come up with a solution that will be too little too late. It is probable that a clean power requirement for AI data centres will be implemented. However, it is unlikely that Democrats would support licensing or any other measures that would significantly disrupt the market. They would prefer to address issues as they arise rather than be held responsible for jeopardizing the booming sector. EU to come to the rescue? In all of this, one might look to the EU to come up with a proper set of regulations for AI. However, while they may pass regulations that govern AI, it is highly unlikely to be anything but proper. The way the EU has dealt with the subject till now, does not instil confidence - instead of properly regulating AI, authorities in Europe have best decided to completely stymie the development of AI. **Also read: OpenAI CEO’s warning to Europe: Will pull ChatGPT out of EU if regulations are too overbearing** So much so that Sam Altman, the CEO of OpenAI was forced to issue a statement saying that if AI regulations are too strict, he may have to pull OpenAI out of the EU. Later, he had to amend his statement saying that he won’t be leaving the EU, but work closely with them to help formulate the regulations. If AI is to be regulated, India needs to step up AI certainly will be regulated at some point in time. The question we should be asking is whether will AI be regulated in a timely manner and in a way that is meaningful and limits its potential to harm people and society. The answer to that question, unfortunately, looks like a no, if we keep on looking to the US and the EU. Meaningful regulation of AI, therefore, has to come from somewhere else. It won’t be China, as we have already seen - they have already shadowbanned AI for the public in a way and is very heavily regulating how AI is developed and who gets access to it. China is also regulating how AI is implemented in businesses. That leaves India to be the only major economy that can have a meaningful impact by drafting regulations which will shape AI, ensures that it is equitably accessible to everyone, and that it grows to its fullest potential. India is already one of the places where American and European firms are looking for talent to develop their own AI models. Clearly, we know what we’re doing. And as stated, we have already influenced the tech-based policies of other countries. India was the first country to ban several Chinese apps on the grounds that they were mining data of the local populace and sending it to China. While the world may have come to call the current onslaught on China’s tech practices part of the US-China tech war, the fact remains that it was India that sounded the bugle. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.