www.zerohedge.com By Tyler Durden
by Elen Irazabal Arana and Nikolai G. Wenzel via TheDailyEconomy.org
Last month, we lamented California’s Frontier AI Act of 2025. The Act favors compliance over risk management, while shielding bureaucrats and lawmakers from responsibility. Mostly, it imposes top-down regulatory norms, instead of letting civil society and industry experts experiment and develop ethical standards from the bottom up.
Perhaps we could dismiss the Act as just another example of California’s interventionist penchant. But some American politicians and regulators are already calling for the Act to be a “template for harmonizing federal and state oversight.” The other source for that template would be the European Union (EU), so it’s worth keeping an eye on the regulations spewed out of Brussels.
The EU is already way ahead of California in imposing troubling, top-down regulation. Indeed, the EU Artificial Intelligence Act of 2024 follows the EU’s overall precautionary principle. As the EU Parliament’s internal think tank explains, “the precautionary principle enables decision-makers to adopt precautionary measures when scientific evidence about an environmental or human health hazard is uncertain and the stakes are high.” The precautionary principle gives immense power to the EU when it comes to regulating in the face of uncertainty — rather than allowing for experimentation with the guardrails of fines and tort law (as in the US). It stifles ethical learning and innovation. Because of the precautionary principle and associated regulation, the EU economy suffers from greater market concentration, higher regulatory compliance costs, and diminished innovation — compared to an environment that allows for experimentation and sensible risk management. It is small wonder that only four of the world’s top 50 tech companies are European…
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