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Cybersecurity In-Depth

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The Edge

6 MIN READ

The Edge



HOW THE EU AI ACT WILL AFFECT BUSINESSES, CYBERSECURITY

Recognizing the need to address potential risks and ethical concerns, the draft
AI Act represents a significant step in regulating AI technologies.
Nathan Eddy
Contributing Writer, Dark Reading
July 13, 2023
Source: Ghene Snowdon via Alamy Stock Photo
PDF


Experts are ringing the alarm bells over the risks unfettered development of
artificial intelligence (AI) technology could pose to humanity. Enter the
European Union (EU), already a leader in data protection and privacy rights,
where the EU Parliament has agreed on a law governing AI technology.



Jonathan Dambrot, CEO of Cranium, says it's not surprising that the EU, once
again, has taken the lead on tech regulation.

"We saw this with GDPR and data privacy, and now we're seeing the same with AI,"
he says.



While the text of the so-called AI Act will likely undergo further refinements
and modifications, steady progress on the law indicates governments are stepping
up to the challenge of harnessing — or attempting to harness — a technology that
has come to dominate headlines in a few short months.



"As businesses navigate this landscape, it is crucial to understand the context
of existing regulations, such as the GDPR, and the key elements of the upcoming
AI Act," says Kyle Kappel, US leader for cyber at KPMG.

From his perspective, compliance with these regulations means putting into
practice more robust data management, including careful handling of user
information.

"Businesses should also be prepared to ensure explainability of AI decisions,
document AI behavior, and potentially undergo external testing to address
concerns like bias," he adds.

Compliance with evolving AI regulations will likely drive businesses to
establish cohesive data and AI/machine learning operational practices (MLOps),
treating regulations as interconnected components.


A DOUBLE-EDGED SWORD

Craig Jones, vice president of security operations at Ontinue, says the new
regulatory environment could be a double-edged sword.



"While it might stimulate more robust, ethical, and secure AI applications in
cybersecurity, it has the potential to curb experimental approaches and slow
down the speed of innovation," he says.

From Jones' perspective, it's a tightrope walk between ensuring responsible AI
use and maintaining a vibrant, dynamic research and development ecosystem.

"On the upside, the [AI] Act provides a regulatory safety net that seeks to
ensure ethical and safe AI applications, which can instill more public trust in
these technologies," he says. "It also raises the bar for AI transparency and
accountability."

The downside might be that it could temper the pace of AI innovation, making the
EU less attractive for AI startups and entrepreneurs.

"The balance between transparency and protection of proprietary algorithms also
poses a complex challenge," Jones notes.


GLOBAL IMPACT ON AI REGULATION

Chris Vaughan, vice president of technical account management at Tanium, says
the AI Act will force many commercial organizations to work within the EU
framework.

"It is a powerful and well-established marketplace that many companies wish to
conduct businesses within," he says. "To do so they must be compliant with EU
law. This instantly creates a global impact."

Cranium's Dambrot agrees that the EU's decision will "absolutely" have a global
impact, just like the GDPR did.

"People are more afraid of AI than their privacy historically. The need for the
EU, US, China, and every major power to regulate will be important for the
adoption of AI universally," he says. "With the EU AI Act, Europe is leaning in
and taking a first mover advantage in these regulations."

If there's no comprehensive framework or guidance, Dambrot adds, then US
companies are going to have competing compliance pressures at the state and
federal levels.

"Although the precedent for privacy is for states to take the lead, my hope is
that there be a comprehensive AI regulation, like the EU AI Act, to help
regulate the responsible and safe use of AI," Dambrot says.

This will help make it easier for both US and foreign AI developers to better
serve and navigate clients securely, he notes.

"It's really interesting when you see major tech players, like OpenAI, say to
Congress, 'Please regulate us,'" Dambrot adds.


US FACES CHALLENGING REGULATORY HURDLES

Not everyone is so sure the US will act with speed, however, including Mike
Britton, CISO of Abnormal Security. Britton says the Feds will face several
roadblocks in following suit. For starters, the US lags when it comes to privacy
and regulation in general.

"It's complicated for a variety of reasons, including the fact that privacy is
not a fundamental right in the US like it is in Europe," he says.

Another big challenge for US lawmakers: Privacy regulations are implemented
around specific types of information — HIPAA for healthcare, GLBA for financial
services, and COPPA for protection of children's privacy.

"There is currently very little desire to harmonize these various privacy laws
since agencies and organizations have already laid claim to the regulations that
govern these areas," Britton says.

Finally, he points out "Big Tech" has been extremely successful in lobbying for
self-regulation and taking a laissez-faire approach to regulating technology.

"I imagine they will push hard to do the same here," Britton says. "On the
bright side, the White House recently released an AI Bill of Rights, which shows
that there is some consideration being given to the issue."


IMPACT OF AI ON CYBERSECURITY

Dambrot predicts AI will worm its way into almost every cyber function, from
incident response and security operations centers to third-party risk and other
applications. CISOs who have not yet prioritized AI until this year now must
play catch-up, he warns.

"Technology such as ChatGPT is now at a point where it can rewrite malware —
meaning traditional detection programs are unable to identify it," Tanium's
Vaughan explains.

Vaughan predicts cybersecurity and AI innovation will compete in a game of cat
and mouse to see which can develop quicker.

"For example, as malware, phishing, and cyberattacks evolve, the defensive
counterparts must develop alongside," he says. "We also need protection against
the malicious use of AI technology, such as deepfakes. We have enough problems
with online harassment with real images — permitting fake images into the mix
could have catastrophic results."


HOW PRIVACY REQUIREMENTS AFFECT AI

The EU legislation focuses on aspects of AI that can harm individuals, which
could affect how the technology progresses.

"AI innovations may become more difficult," Vaughan says. "AI algorithms are
based on data, which must be sourced from somewhere."

So far there have been few — if any — requirements for AI developers to reveal
where they got their data or how they used it to teach their AI systems.

However, with the new EU legislation, innovators will have to openly state the
origin of their data and provide details on how they used it to train their AI
algorithms. This is to ensure transparency and accountability in the development
of AI technology.

"There are some unintended consequences. Consider the right to be forgotten,"
Dambrot says. "If individuals can demand that their [personally identifiable
information], which may have been included in training a model, be removed, then
what's the security impact to that model?"

Adds Vaughan: "This creates additional red tape to businesses but ultimately
protects people. "A slight delay in innovation is a worthy sacrifice for
safety."

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