China unveils preliminary rules for generative AI, including licensing regime

With the rapid development of generative artificial intelligence, China has taken the lead in determining how to use this rapidly changing technology, including the licensing regime for service providers.

China's top cyberspace regulator on Thursday unveiled a set of temporary rules governing generative AI services, including API providers serving Chinese users.

The question is whether China's quick response to limit generative AI and tight regulations will lead to a deterrence of innovation. Policymakers are well aware of this concern, emphasizing in the document that the rules aim to "balance development and security."

Above all, the rules require generative AI vendors to adhere to core socialist values, which prohibit everything from pornography and terrorism to racism and content that threatens China's national security.

Algorithms capable of influencing public opinion, according to the rules, must be registered with the relevant authority. Providers of generative AI services must also obtain an administrative license under the law, although the document does not specify who exactly must do so.

In terms of user protection, the rules stipulate that algorithms should not discriminate on grounds such as ethnicity, gender, age, profession or health status, nor should they be used for anti-competitive behavior. Service providers are encouraged to establish an addiction protection system for underage users, similar to that used in video games.

Service providers are responsible for detecting and stopping the generation of illegal content, as well as for subsequently correcting the algorithms and reporting the incident to the appropriate authority. This means that prompting an image generator or chatbot can lead to legal trouble for individuals.

In addition, regulators are entitled to know the specifics of the generative AI model, including its training data, size, type, labeling rules, and algorithms.

Finally, the development of AI in China is top-down. The document calls for the creation of a public platform for data learning and sharing computing power. Beijing has already proposed specific rules for creating a public centralized platform that allocates public cloud resources based on customer needs.

As in other critical industries, China calls for "independent innovation" in AI algorithms, frameworks, chips, software platforms and other infrastructure, but encourages "equal and mutually beneficial" international cooperation.