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UK report calls for legislation to allow companies to ‘plug AI into British economy’



The UK government should offer tax breaks for businesses developing AI-powered products and services, or applying AI to their existing operations, to “unlock the UK’s potential for augmented productivity”, according to a new University of Cambridge report.

Researchers argue that the UK currently lacks the computing capacity and capital required to develop generative machine learning models fast enough to compete with US companies such as Google, Microsoft or Open AI.

Instead, the researchers called for a UK focus on leveraging these new AI systems for real-world applications – such as developing new diagnostic products and addressing the shortage of software engineers, for example – which could provide a major boost to the British economy.

However, they caution that without new legislation to ensure the UK has solid legal and ethical AI regulation, such plans could falter. British industries and the public may struggle to trust emerging AI platforms such as ChatGPT enough to invest time and money into skilling up.

The policy report is a collaboration between the univerdity’s Minderoo Centre for Technology and Democracy, Bennett Institute for Public Policy, and ai@cam: the University’s flagship initiative on artificial intelligence.

Dame Diane Coyle, Bennett Professor of Public Policy. Said:

“Generative AI will change the nature of how things are produced, just as what occurred with factory assembly lines in the 1910s or globalised supply chains at the turn of the millennium.

“The UK can become a global leader in actually plugging these AI technologies into the economy.”

Prof Gina Neff, Executive Director of the Minderoo Centre for Technology and Democracy, added:

“A new Bill that fosters confidence in AI by legislating for data protection, intellectual property and product safety is vital groundwork for using this technology to increase UK productivity.”

Generative AI uses algorithms trained on giant datasets to output original high-quality text, images, audio or video at rapid speed and scale.

The text-based ChatGPT dominated headlines this year, with other examples including Midjourney, which can conjure imagery in any different style in seconds.

Clusters of computing hardware called GPU are required to handle the vast quantities of data that hone these machine-learning models.

For example, ChatGPT is estimated to cost $40 million (£32 million) a month in computing alone.

Earlier this year, the UK chancellor announced £100 million for a “Frontier AI Taskforce” to scope out the creation of home-grown AI to rival the likes of Google Bard.

However, the report notes that the supercomputer announced by the UK chancellor is unlikely to be online until 2026, while none of the big three US tech companies – Amazon, Microsoft or Google – have GPU clusters in the UK.

Report co-author, Sam Gilbert said: “The UK has no companies big enough to invest meaningfully in foundation model development..

“State spending on technology is modest compared to China and the US, as we have seen in the UK chip industry.”

As such, the UK should use its strengths in fin-tech, cybersecurity and health-tech to build the apps, tools and interfaces that harnesses AI for everyday use, says the report.

Gilbert said “Generative AI has been shown to speed up coding by some 55 per cent, which could help with the UK’s chronic developer shortage.

“In fact, this type of AI can even help non-programmers to build sophisticated software.”

Moreover, the UK has world-class research universities that could drive progress in tackling AI stumbling blocks such as the cooling of data centres to the detection of AI-generated misinformation.

At the moment, however, UK organisations lack incentives to comply with responsible AI, the report found.

Report co-author, Dr Ann Kristin Glenster, said: “The UK’s current approach to regulating generative AI is based on a set of vague and voluntary principles that nod at security and transparency.”

“The UK will only be able to realise the economic benefits of AI if the technology can be trusted, and that can only be ensured through meaningful legislation and regulation.”

Alongside new AI laws, the report suggests a series of tax incentives, such as an enhanced Seed Enterprise Investment Scheme, to increase the supply of capital to AI start-ups, as well as tax credits for all businesses including generative AI in their operations.

Challenge prizes could be launched to identify bottom-up uses of generative AI from within organisations, the researchers added.

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