Malaysia wants to create a regulatory framework for AI. This is a terrible idea
Rather than follow the lead of the EU, Malaysia should instead look to the US and India on how to manoeuvre the ever evolving AI landscape.
“AI is as risky as pandemics and nuclear war”
“AI poses risk of extinction, industry leaders warn”.
The above are some of the many alarmist news headlines that have been bludgeoning readers, including many in Malaysia, over the past few years. AI anxiety has taken the world by storm, fuelled in large part by a lack of understanding of the nascent technology.
Governments around the world, in an attempt to feel relevant, have inserted themselves into the conversation by proposing regulations of all sorts to try to reign in the technology.
Just last week, we saw European regulators gloat about how they’ve come up with a regulatory framework for AI.
“Europe is NOW a global standard-setter in AI,” Thierry Breton, the bloc’s commissioner for the internal market, wrote on X.
I think this is a clear case of those who can’t create, regulate.
Europe's decline in the technological race
There’s a reason Europe is becoming increasingly irrelevant when it comes to technology, and why it is home to few innovative companies (one glaring exception being ASML, the Dutch semiconductor giant).
There’s a reason it’s by and large not pushing the technological envelope forward.
The new AI Act that the EU has introduced, though seemingly reasonable, will invariably cause incredible amounts of friction and will slow the rate of progress.
Being new, such technologies have few traditional corollaries that can be used to assess their risks and capabilities.
Trying to do so proactively, especially when teams in other continents don’t have to abide by these regulations, means European teams will be left by the wayside.
This is especially pertinent as Malaysia is in the midst of creating an AI governance and code of ethics - a precursor to an AI regulatory framework.
Just last week, the Consumer Association of Penang (CAP) came out in support of this move and encouraged Malaysia to follow in the footsteps of the EU.
Malaysia’s science, technology and innovation Minister Chang Lih Kang and communications and digital minister Fahmi Fadzil have been proponents of this push for regulation with support from the National Tech Association of Malaysia (PIKOM) chief executive officer Ong Kian Yew, who says such regulation will spur innovation towards responsible development.
I cannot begin to express what a terrible idea this is.
What are we trying to regulate? Malaysia doesn’t even have a thriving AI industry. Malaysia doesn’t even have category-leading AI companies that are pushing the boundaries of what’s possible.
What will happen if Malaysia introduces AI regulation?
By even considering regulation at this nascent stage, we are putting the cart before the horse. In fact, it’s worse. Regulating a next to non-existent industry is not just nonsensical, but dangerous.
Those who want to work in AI will absolutely shun Malaysia for other countries that don’t erect regulatory hurdles. Malaysia is neither a tech hub nor a destination that foreign entrepreneurs think of when considering setting up their businesses.
The moment we set up regulation, I can assure you, no one will want to start an AI company in Malaysia. And those who already have will look to flee to Singapore, which has a far more vibrant tech ecosystem and a more cohesive, nationwide approach to encouraging AI development.
In addition, entrepreneurs and innovators are often creatives. They don’t like being pigeonholed or told they can’t do things, or that they need to ask permission to do things, especially when it’s premature, nonsensical and thwarts technological progress. Regulation often does exactly this, and in fact, it’s worse.
Regulation disproportionately favours larger companies with deeper pockets. A company like Microsoft, or Meta, with their multi-billion dollar corporate treasuries, would be able to hire additional personnel to appease the regulatory overlords.
But the 2-person upstart team innovating in their parents’ garage? Where will they get the funds and personnel needed to do the additional work to ensure that the often arbitrary regulations are met?
In addition, in a field as fast moving as AI, the time small teams spend doing the paperwork necessary to appease regulators would absolutely be a death knell, allowing better funded competitors to wrestle away their lead.
Why would anyone in their right mind want to do business in a country that erects such barriers to speed in an industry where speed is of the essence?
And in today’s globalised, connected world, it’s getting ever easier to simply move to a region with less regulatory scrutiny, which is exactly what innovators will do.
America’s lack of regulations, India's U-turn on AI
For example, OpenAI would not have been able to launch ChatGPT if the US had erected AI regulations.
The very lack of regulations is what allowed a group of highly capable engineers to come up with breakthrough technology that has sparked an AI renaissance across the world.
In addition to OpenAI, multiple teams in the US are now locked in the modern day equivalent of an arms race - to develop ever better and more capable AI models for a multitude of industries and verticals.
This is only possible thanks to a lack of regulations, without which all but the largest of companies with the deepest of pockets would wither and die.
Similarly, India, which once required companies to seek its approval before launching a new AI model, is now walking back this requirement.
As reported by TechCrunch on 16 March, “The revision follows India's IT ministry receiving severe criticism earlier this month from many high-profile individuals. Martin Casado, a partner at venture firm Andreessen Horowitz, had called India's move "a travesty."
Following this U-turn, firms are “advised to label under-tested and unreliable AI models to inform users of their potential fallibility or unreliability”, which is fair and reasonable.
How should Malaysia approach AI
Malaysia’s approach should mirror the US and India and not Europe.
Instead of even thinking of regulation, the Malaysian government should signal to the world that we’re an AI-friendly country and that anyone who sets up an AI startup or wants to expand to Malaysia can get access to a myriad of grants, subsidies and incentives.
A fantastic example of this is Malaysian infrastructure giant YTL’s recent partnership with NVIDIA.
In the words of Jensen Huang, the CEO of NVIDIA: "NVIDIA is working with YTL AI Cloud to bring a world-class accelerated computing platform to Southeast Asia – helping drive scientific research, innovation and economic growth across the region.”
Progress is inevitable. Change is inevitable. Disruption is inevitable. Premature regulation is the mentality of the disrupted. Embracing new technology and regulating retroactively is the mentality of the disruptor. And Malaysia badly needs to be a disruptor.
If Malaysia stands in the way of progress, talent will simply flee somewhere it isn’t thwarted. And considering where we are as a country, we certainly can’t afford this.
Kathirgugan is an inventor and food robotics pioneer who has worked in Silicon Valley, Shenzhen and Singapore. All views expressed are the writer's own.
Do you have a story tip? Email: malaysia.newsroom@yahooinc.com.
You can also follow us on Facebook, TikTok and Twitter. Also check out our Southeast Asia, Food, and Gaming channels on YouTube.
