The larger problem with no fault liability are the deluge of unimportant and frivolous lawsuits. Get someone in a court room whose DIY deck collapsed because of wrong advice from the free version of ChatGPT, and a jury will 100% sympathize with the poor guy with a broken leg and “mental suffering” than the trillion dollar company.
If you can win a lawsuit for drinking McDonalds coffee that’s too hot, or for getting injured when trespassing, or being negligent/lazy and getting injured at work, then the millions (billions?) of people using AI every day are going to have thousands of lawsuits per day coming up. Because so long as there’s some plausible route to assigning blame, and a law or legal precedent allowing for that blame, there will be many lawyers ready to pounce. Especially if all the ambulance-chasing lawyers lose their lobbying and self-driving cars become more common.
Think Digital Safe Harbor laws. Without them, a company like Youtube, Instagram, Facebook, etc. basically couldn’t exist. Instead of a DMCA takedown, and a garnishing of ad-revenue from a creator with copyright-infringing content, they would just sue YouTube where there’s about a million times more upside. The nuisance value of the lawsuits alone would make the internet a much worse place.
Of course there is some level of liability that would probably be good, without coming with a million unimportant lawsuits, but without that spelled out, the result will not be positive.
Under 5% of AI compute is hosted in the EU (as opposed to ~90% in US+China), only ~one of the frontier companies are headquartered in the EU, and the act is designed in a way that the United States (at the time the Biden administration) found very dissatisfactory, as it was seen as promoting EU interests over American interests. China was essentially not involved.
The act doesn’t even require the reporting of the Hugging Face incident as it’s currently designed, since it exempts pre-market research and testing. It also doesn’t require reporting for models used for military purposes. They are essentially limited to imposing fines, which historically have maxed out at a few billion dollars, which is not a compelling enough number to greatly alter how the AI companies behave.
If the goal is to have a regulatory framework that the frontier AI companies actually comply with, it can’t be top-down imposed by an unelected group of people in a political organization that has no jurisdiction over where the companies are based, pay taxes, and train their models.
Even if the US Code of Practice was word-for-word the exact same as the EU version, if it was willingly entered into by the US AI companies, and was under US jurisdiction, it would have an order of magnitude more credibility and enforcement power.