President Biden Issues Executive Order on AI – What You Need to Know

On October 30, 2023, President Biden issued the Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (EO). The EO is a sweeping directive to government agencies to coordinate on all aspects of AI.  As the EO states in Section 1:

“My Administration places the highest urgency on governing the development and use of AI safely and responsibly, and is therefore advancing a coordinated, Federal Government-wide approach to doing so. The rapid speed at which AI capabilities are advancing compels the United States to lead in this moment for the sake of our security, economy, and society.”
The administration realizes that Congress will likely not get a law passed that would provide guidance and regulations to the use of AI in the private sector, so the EO requires various agencies to take the lead within the agency’s purview.

This EO will impact employers down the road. Rachel See, senior counsel at Seyfarth Shaw LLP, said any guidance would likely start with analyzing the FLSA in the context of AI. “I think our starting point is, what does the statutory text and what does the case law say, and certainly diving into that is something that is going to happen,” said See.

To start with, the definition of AI ranges from the most basic to more complex programs. The EO sets forth several key definitions, including the definitions of AI, AI model, AI system, generative AI, and machine learning, among others.

• “Artificial intelligence” or “AI” – A machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments. Artificial intelligence systems use machine and human-based inputs to perceive real and virtual environments; abstract such perceptions into models through analysis in an automated manner; and use model inference to formulate options for information or action.
• “AI model” – A component of an information system that implements AI technology and uses computational, statistical, or machine-learning techniques to produce outputs from a given set of inputs.
• “AI system” – Any data system, software, hardware, application, tool, or utility that operates in whole or in part using AI.
• “Generative AI” – The class of AI models that emulate the structure and characteristics of input data in order to generate derived synthetic content. This can include images, videos, audio, text, and other digital content.
• “Machine learning” – A set of techniques that can be used to train AI algorithms to improve performance at a task based on data.

Further, although the EO is for agency action, the EO does hit employers in various ways.

• Dual-Use Foundation Models – Requires companies that develop potential dual-use foundation models to submit reports to the U.S. Department of Commerce (Commerce) outlining their training and testing procedures and plans to protect their technology.
• Cloud Computing Reporting – Requires entities that have a large-scale computing cluster to report to Commerce certain information, including the location of these clusters and the amount of total computing power per cluster.
• Foreign Use of Cloud Computing for Training AI Models – Directs the Secretary of Commerce, within 90 days, to propose regulations that require U.S. Infrastructure as a Service (IaaS) providers to submit a report to Commerce when a foreign person transacts with that U.S. provider to “train a large AI model with potential capabilities that could be used in a malicious cyber-enabled activity.”
• Identification of Foreign Actors – Directs the Secretary of Commerce, within 180 days, to propose regulations that require US IaaS providers to ensure that foreign resellers of United States IaaS products verify the identity of any foreign person that obtains an IaaS account.

In particular, it requires that the Secretary of Labor complete specific tasks related to employment.

Section 5 (e) provides:  “Within 45 days of the date of this order, for purposes of considering updates to the ‘Schedule A’ list of occupations, 20 CFR 656.5, the Secretary of Labor shall publish a request for information (RFI) to solicit public input, including from industry and worker-advocate communities, identifying AI and other STEM-related occupations, as well as additional occupations across the economy, for which there is an insufficient number of ready, willing, able, and qualified United States workers.”

Section 6 (a) (ii) states: “Within 180 days of October 30, 2023 [the DOL is required] “[t]o evaluate necessary steps for the Federal Government to address AI-related workforce disruptions, the Secretary of Labor shall submit to the President a report analyzing the abilities of agencies to support workers displaced by the adoption of AI and other technological advancements.”

A report is required by the DOL and encompasses the following:

• (A) job-displacement risks and career opportunities related to AI, including effects on job skills and evaluation of applicants and workers;
• (B) labor standards and job quality, including issues related to the equity, protected activity, compensation, health, and safety implications of AI in the workplace; and
• (C) implications for workers of employers’ AI-related collection and use of data about them, including transparency, engagement, management, and activity protected under worker-protection laws.

The question of whether AI is a doomsday device set to implode the employment area or a simple tool that allows employers to experience greater productivity, or somewhere in-between, is yet to be seen. But without congressional action and urging of AI developers, the President took the initial steps to understand and to “control” the potential AI impact on the labor market.

Source: DirectEmployers 11/6/23, Steptoe and Steptoe 11/6/23, Littler 11/3/23, Law360 11/3/23

By Anthony Kaylin, courtesy of SBAM-approved partner, ASE.

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