China says generative AI rules to apply only to products for the public

July 16, 2023

By Josh Ye

HONG KONG (Reuters) – China published measures on Thursday to manage its booming generative artificial intelligence (AI) industry, softening its tone from an earlier draft, and said regulators would seek to support development of the technology.

The rules, set to take effect on Aug. 15 and which Beijing described as “interim”, come after authorities signalled the end of their years-long crackdown on the tech industry, whose help they seek to spur an economy recovering more slowly than expected after the scrapping of COVID-19 curbs.

Analysts said they were far less onerous than measures outlined in an April draft, and that the final rules also took care to stress that China wanted to be supportive of the technology while at the same time ensure security.

The Thursday statement from the Cyberspace Administration of China (CAC) said only providers who wanted to offer services to the public would need to submit security assessments, suggesting that firms working on enterprise-facing products would be given leeway.

“The draft regulations had untenable standards for the quality of training data and accuracy of output, essentially demanding perfection. The final version walks this way back, obliging companies to take ‘effective measures’ towards these goals,” said Tom Nunlist, a technology analyst at research firm Trivium China.

Investment has poured into China’s generative AI scene and its firms such as Baidu, Alibaba Group have launched dozens of AI models. But companies had held back from rolling out chatbots to the public until Beijing finalised rules for the technology and approved their products.

Instead, most of the Chinese tech companies had for now focused on finding applications for industrial use. On Thursday, JD.com became the latest to join the race, launching an enterprise-facing large language model it called ChatRhino.

“The current version is very much in line with market expectations,” said Kai Wang, an analyst with Morningstar.

“It sends the positive signal that the regulators are paving the way for companies in China to launch their products on a large scale.”

China says generative AI rules to apply only to products for the public — An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song

“SOCIALIST VALUES”

China sees AI as an area in which it wants to rival the United States, and on which it has set it sights on becoming a world leader by 2030.

It is seen to be ahead of the regulatory curve as countries globally grapple with setting guardrails for the technology popularised by the success of OpenAI’s ChatGPT chatbot.

Such efforts must weigh up safety concerns and copyright protections against ensuring an environment beneficial to innovation.

The CAC’s Thursday statement reiterated that content generated by generative AI for the public had to be in line with China’s core socialist values.

Service providers had to ensure intellectual property rights were not infringed, it added, advising that legitimate data sources should be used.

China wants to encourage the development of the technology, it said, citing areas such as generative AI algorithms and semiconductors, as well as engage in drawing up international rules.

“Relevant national authorities shall … improve their supervisory methods so that they are scientific and compatible with innovation and development,” the regulator said.