‘We shouldn’t regulate AI until we see meaningful harm’: Microsoft chief economist to WEF

Microsoft’s corporate VP and chief economist tells the World Economic Forum (WEF) that AI will be used by bad actors, but “we shouldn’t regulate AI until we see some meaningful harm.”

Speaking at the WEF Growth Summit 2023 during a panel on “Growth Hotspots: Harnessing the Generative AI Revolution,” Microsoft’s Michael Schwarz argued that when it came to AI, it would be best not to regulate it until something bad happens, so as to not suppress the potentially greater benefits.

“I am quite confident that yes, AI will be used by bad actors; and yes, it will cause real damage; and yes, we have to be very careful and very vigilant,” Schwarz told the WEF panel.

“We shouldn’t regulate AI until we see some meaningful harm that is actually happening — not imaginary scenarios” — Michael Schwarz, WEF Growth Summit, 2023

“I am quite confident that yes, AI will be used by bad actors; and yes, it will cause real damage; and yes, we have to be very careful and very vigilant” — Michael Schwarz, WEF Growth Summit, 2023

When asked about regulating generative AI, the Microsoft chief economist explained:

“What should be our philosophy about regulating AI? Clearly, we have to regulate it, and I think my philosophy there is very simple.

“We should regulate AI in a way where we don’t throw away the baby with the bathwater.

“So, I think that regulation should be based not on abstract principles.

“As an economist, I like efficiency, so first, we shouldn’t regulate AI until we see some meaningful harm that is actually happening — not imaginary scenarios.”

Moderator Zain Asher, who is an anchor at CNN International, appeared taken aback by Schwarz’s statement, saying, “You mean, wait until we see harm before we regulate it?”

To which the Microsoft corporate VP reaffirmed, “Well, I would say yes because we could not predict where or whether your problems would be.”

Schwarz backed up his claim by saying that driver’s licenses were only issued after a lot of people died, and that that was the right decision.

“There has to be at least a little bit of harm, so that we see what is the real problem” — Michael Schwarz, WEF Growth Summit, 2023

“The first time we starting requiring driver’s license it was after many dozens of people died in car accidents, right, and that was the right thing,” said Microsoft’s chief economist.

“If we would have required driver’s licenses where there were the first two cars on the road, that would have been a big mistake. We would have completely screwed up that regulation.

“There has to be at least a little bit of harm, so that we see what is the real problem.

“What is the real problem? Did anybody suffer at least a thousand dollars because of that?

“Should we jump to regulate something on a planet of eight billion people where there is not even a thousand dollars of damage? Of course not!

“So, once we see real harm, then we have to ask ourselves a simple question, ‘could we regulate it in a way where the good things that will be prevented by this regulation are less important and less valuable than the harm that we prevent?’

“You don’t put regulation in place to prevent a thousand dollars worth of harm where the same regulation prevents a million dollars worth of benefit to people around the world,” he added.

“I think that people who worry about AI taking away jobs are paranoid” — Michael Schwarz, WEF Growth Summit, 2023

“Before AI could take all your jobs, it could certainly do a lot of damage in the hands of spammers, people who want to manipulate elections” — Michael Schwarz, WEF Growth Summit, 2023

Concerning fears that AI will take away jobs, Schwarz said that those people were being paranoid, and the real concern should be AI in the hands of bad actors loo

“I think that people who worry about AI taking away jobs are paranoid. I don’t think people should be worried too much about it. It’s a good thing when AI makes us more productive.

“I think they should be worrying a lot more about AI being used by bad actors to cause damage, because please remember breaking is much easier than building.

“So, before AI could take all your jobs, it could certainly do a lot of damage in the hands of spammers, people who want to manipulate elections, and so on and so forth.”

Nevertheless, the Microsoft corporate VP and chief economist believes that AI shouldn’t be regulated until after it causes real-world harm.

On January 23, 2023, Microsoft extended its partnership with OpenAI — the creators of ChatGPT — investing an additional $10 billion on top of the “$1 billion Microsoft poured into OpenAI in 2019 and another round in 2021,” according to Bloomberg.

The World Economic Forum Growth Summit 2023 ran from May 2-3.