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Speaker 1: Bloomberg Audio Studios, podcasts, radio News.

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Speaker 2: Now, the European Parliament is set to pass its landmark

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Speaker 2: Artificial Intelligence Act today. It'll be the most comprehensive legal

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Speaker 2: framework on AI worldwide. Joining us now to discuss is

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Speaker 2: Kirsten Rolf, who was former head of Digital Policy for

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Speaker 2: the German Chancellory under Chancellor's Olaf Schultz and Angela Merkel.

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Speaker 2: Is now a partner at Boston Consulting Group. Kristin, Welcome

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Speaker 2: to Bloomberg Radio. Great to have you with us. You

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Speaker 2: helped to negotiate the AI Act in your former role.

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Speaker 2: What's your view of this final piece of legislation. It

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Speaker 2: doesn't go far enough to regulate this technology.

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Speaker 1: I think we're witnessing a pivotal moment here. I think

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Speaker 1: the European AI will help businesses actually scale artificial intelligence,

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Speaker 1: and that is actually not that easy. But with the

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Speaker 1: rules that the AI brings into play, they will have

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Speaker 1: a quality control mechanism and it will answer many of

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Speaker 1: the questions that businesses have on AI governance, and that

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Speaker 1: a current really inhibiting that growth, that scaling of AI

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Speaker 1: that we want to see in businesses. So I think overall,

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Speaker 1: it gives legal certainty, It gives a quality insurance mechanism

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Speaker 1: and it will help businesses scale. So I think the

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Speaker 1: AIAC is pretty good news for businesses globally, not just in.

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Speaker 3: The EU, because when the technology is changing so rapidly,

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Speaker 3: can the legislation keep up? Will it become redundant quickly?

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Speaker 1: I don't think so. Tech regulation is always behind the

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Speaker 1: technology development, and that's actually a good thing because we

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Speaker 1: don't want to regulate technology before we actually have had

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Speaker 1: some experience with it. We don't want to inhibit innovation

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Speaker 1: and business is actually trying out this new technology. But

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Speaker 1: what the European AI Act actually does is regulate the risks,

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Speaker 1: and that is something that is truly bothering CEOs and

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Speaker 1: business business makers these days, and they want to have

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Speaker 1: some certainties on these risks to actually go ahead. So

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Speaker 1: it's not stifling innovation. It gives the necessary framework to

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Speaker 1: actually scale innovation.

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Speaker 2: What do you make that of criticism that the EU

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Speaker 2: got played by the French startup Mistral that argued against

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Speaker 2: stringent general purpose AI rules because they could hurt European

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Speaker 2: competition with the US.

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Speaker 1: I think the real question to ask here is how

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Speaker 1: to actually discuss future proof regulation in the future, discuss

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Speaker 1: how regulation can support businesses and not just national champions,

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Speaker 1: but actually the broader variety of businesses that we see

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Speaker 1: in the European Union, small and medium enterprises, manufacture industries,

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Speaker 1: and not just look out to get that geopolitical competition

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Speaker 1: going between Europe, the US and China that is so

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Speaker 1: well loved by policy makers, and that has been a

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Speaker 1: very prominent topic in the debate about the European AI.

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Speaker 1: But the real question to ask is how can we

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Speaker 1: actually future proof regulation that helps businesses overall and not

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Speaker 1: just certain businesses.

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Speaker 2: Well, on that note, I mean Europe has struggled to

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Speaker 2: produce national or even kind of union wide champions in

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Speaker 2: this area. Is this regulation not going to put them

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Speaker 2: at a disadvantage?

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Speaker 1: What European businesses actually can become are the world champions

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Speaker 1: of implementing the technology. I think it's not really important

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Speaker 1: to have the one or two companies that are ahead

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Speaker 1: in this technology and developing it, but actually the broad

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Speaker 1: number of businesses that implement this technology. And just to

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Speaker 1: give an example, the European AI focuses on the core

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Speaker 1: businesses in Europe banking, for instance, manufacturing, car manufacturing, insurance,

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Speaker 1: and those core businesses need legal certainty to implement the technology.

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Speaker 1: They're not going to be the ones that develop technology

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Speaker 1: like a tech company, but they're actually over all the

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Speaker 1: strong businesses in the European Union, and they need regulation

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Speaker 1: to scale it. So I think rather than looking at

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Speaker 1: the tech companies that we don't have, it's important to

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Speaker 1: look at the companies that we do have and help

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Speaker 1: those businesses actually become more innovative and actually scale the technology.

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Speaker 3: Do you think that this act is going to have

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Speaker 3: any impact on the huge elections we'll have this year.

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Speaker 1: I think that's a really important point and one of

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Speaker 1: the points why the vote was lightly moved up one

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Speaker 1: month from the actual plant date in April. So the

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Speaker 1: EUROPEANAI will become much more, will be implemented much sooner

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Speaker 1: than we all expected. And I think policymakers really felt

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Speaker 1: the urgency here, but also businesses felt the urgency. So

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Speaker 1: it was definitely a question of speed, and it was

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Speaker 1: a question of how can we get this going and

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Speaker 1: really bring Europe at the forefront of this technology.

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Speaker 2: Customer in the businesses that you speak to now in

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Speaker 2: your current job, are they worried about what additional regulation

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Speaker 2: might bring in terms of an administrative burden for them

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Speaker 2: when it comes to I am thinking about you know,

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Speaker 2: GDPR was a huge effort for many companies to try

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Speaker 2: and comply with. This is THEEU AI Act going to

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Speaker 2: produce another level of administration for small businesses.

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Speaker 1: I suddenly see some anxiety among businesses because the European

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Speaker 1: AI is not the only regulation that is coming into

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Speaker 1: effect right now. We see the Data Act that applies

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Speaker 1: to a lot of businesses. We see the Digital Services

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Speaker 1: Act that applies to a lot of businesses. We see EUCS,

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Speaker 1: the Cybersecurity Certification that is coming into effect, and all

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Speaker 1: of that is coming into effect right at the end

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Speaker 1: of this European Commission mandate, when we're about to vote

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Speaker 1: on the European Commission. So I do see a lot

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Speaker 1: of businesses struggling to actually make a checklist for all

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Speaker 1: of these legislation, comprehensive checklist and a globally defendable framework,

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Speaker 1: because that is actually what businesses need now. They need

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Speaker 1: basically the three steps to conquer the tsunami of regulations

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Speaker 1: that we see, and I see a lot of anscis

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Speaker 1: around that. For sure.

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Speaker 3: What were your main frustrations when you were negotiating the

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Speaker 3: EU AII to what was the main thing that you

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Speaker 3: wanted to be included that wasn't in the final copy.

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Speaker 1: That's a very good question. I think as a policy

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Speaker 1: maker you can never become frustrated. You always have to

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Speaker 1: look ahead and think about, Okay, not the things that

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Speaker 1: are not in there, but the things that really are

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Speaker 1: in there. And I think we've come to a result

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Speaker 1: that is helping businesses and that's what I wanted to

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Speaker 1: get out of the negotiations, honestly, a very clear framework

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Speaker 1: that then also will be implemented, not in the way

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Speaker 1: we've seen with GDPR, where we've seen every country basically

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Speaker 1: implement for themselves, but where we have a comprehensive, centrally

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Speaker 1: implemented a legislation that business can actually thrive on. So

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Speaker 1: I think I hope that the AI will deliver on that.

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Speaker 1: It was certainly something that I really wanted to see

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Speaker 1: and I think we will definitely get that, Okay.

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Speaker 2: Kirstin rolf reappreciate your time in program on the Program

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Speaker 2: This Morning, partner at Boston Consulting Group, but former head

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Speaker 2: of Digital Policy at the German Chancellery as well. Great

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Speaker 2: to get your insights on the day the European Parliament

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Speaker 2: is expected to pass the AI Act