In Robert Penn Warren’s All the King’s Men, the author compares the law to a blanket. When used by a big family in the same bed, one family member tugs on the blanket. Then it exposes another to the cold. It’s never big enough to cover the whole family. Perhaps the regulation of AI is the same way. As AI grows, it becomes harder for the blanket to cover it, even if the blanket gets bigger. This brief entry covers the importance of regulatory certainty to emerging intellectual property issues, in general, and AI, in particular, to foster innovation.
Studies show the immense growth of AI. According to Stanford’s HAI, private investment in the AI sector has increased thirteenfold since 2014. Respondents indicating use of generative AI in at least one business function more than doubled – from 33% in 2023 to 71% in 2024. Microsoft indicates more than 80% of Fortune 500 companies are using AI agents or bots.
In non-AI contexts, prominent legal thinkers argue that regulatory certainty – otherwise known as the rule of law – is essential for capital market health. Without this, the rules of the road are uncertain, which is more likely to lead to unstable economic growth, as related by the Atlantic Council.
The same is true for AI applications. The difference is that AI can grow much faster, making the legal blanket even less relevant from yesterday’s application. From ownership to AI creations to the use of scraped info to train, numerous legal issues have arisen in recent years. Some of them have been decided in the U.S. Copyright ownership of AI creations is one indirectly decided by the U.S. Supreme Court. Other issues remain. Whether bot scraping is fair use is still not decided by the Court, although a lower federal court has decided the issue. Even though some important legal issues have been decided within the U.S., there can remain disagreement between jurisdictions.
This is just regulatory consistency. The other issue that remains is bandwidth of enforcement arms to handle the numerous civil and criminal issues that are implicated by AI use. It’s known in some circles as the “pacing problem.” These will, in all likelihood, arise with increased access to AI tools that can be used, to, among other things, create deep fakes to trick various stakeholders. In the pre-digital era, the courts had to deal with a phone spammer in Kansas. Now, the spammers are virtual and are often hard to identify.
For some, the inability of the law to keep up with AI proliferation is a good thing as there is no “regulatory capture.” Whereas for others, this means there are open holes in the regulatory tapestry that will lead to a weathering away of the rule of law. This can eventually decrease the size of the ballooning AI expansion.