Article originally published in Bilan
The 2023 tech zeitgeist might lead one to believe that the fervent pursuit of artificial intelligence comes at the expense of Web3. Yet, these two technologies are inherently complementary. As we contemplate the future of regulation, understanding this symbiotic relationship is paramount.
Breaking down Web3 myths: understanding the real digital stakes
Over the past few months, a clear trend has emerged in the media landscape with AI taking center stage. However, tech leaders view AI not merely as a passing trend, but as a fundamental pillar of digital strategies and technological advancement.
Conversely, the flagship technologies of Web3, such as the metaverse and NFTs, have been gradually sidelined by major corporations. Despite investing over $100 billion, Mark Zuckerberg’s company, Meta, incurred significant losses in 2022, amounting to several billion dollars. Consequently, it scaled back investments in this area and dropped support for NFTs on platforms like Facebook and Instagram.
While Meta is grappling with declining advertising revenue, ironically highlighting the waning momentum of its Web2 model, the report card for Web3 appears bleak.
Tech giants like Microsoft, Google, Amazon, and Salesforce have all tempered their march towards the metaverse, directing their energies instead to AI and its integration into their existing solutions.
Many analysts perceive this shift as a temporary phase. However, it unintentionally seeds a misleading notion: given the substantial development costs, companies might feel compelled to choose between investing in AI or Web3. Worse still is the misconception that these two technologies are competitors. This couldn’t be further from the truth! Such misunderstandings lead to a fragmented understanding of our digital challenges.
We need to stress this: there’s no rivalry between Web3 and AI! In fact, they exist in a symbiotic relationship. When harnessed together, they promise to transcend the boundaries of their individual capacities, enabling us to address technological challenges.
Many organizations wrestle with the dilemma of harnessing AI while maintaining data oversight. Present-day AI, despite its benefits, has its share of foundational weaknesses.
While AI represents a formidable force in the new digital age, its efficacy hinges on vast data sets which cannot guarantee traceability, quality, or confidentiality.
Enter blockchain. It addresses these challenges by enabling any entity, be it machine or human, to exchange information both autonomously and securely.
In this mutually beneficial pairing, AI holds the potential to democratize access to knowledge, while blockchain enhances the traceability of data. Without blockchain’s oversight, AI might inadvertently perpetuate biases and misinformation. Yet, the benefits of integrating Web3 with AI reach far beyond this singular concern. They offer solutions to significant obstacles in cybersecurity, personalized customer experiences, intelligent automation, transaction efficiency, and cross-business collaboration.
Many businesses already recognize these needs. Numerous sectors are gearing up to embrace AI-Web3 integrations, from banking and finance to luxury, advertising, and gaming.
Innovation in these domains requires a holistic approach. When businesses rely exclusively on one technology they risk stunting growth, or worse, falling behind.
Broadening the regulation gap
Just as crucial as crafting investment strategies is the design of relevant regulations that address the misunderstood divide between AI and Web3. The misconception that Web3 and AI are adversaries isn’t just technologically or economically detrimental. It hinders the development of truly effective regulations that should look beyond the tools to the broader challenges at hand.
Legislative minds need to consider the interplay between these technologies, especially in Europe. They must anticipate and shape legal frameworks that address pivotal digital concerns: data and privacy protection, transparency and accountability of digital entities, prevention of bias and discrimination in our digital lives, countering cybercrime, platform interoperability, and the standardization of information systems. Furthermore, they must promote responsible practices to moderate the impact of these technologies on employment and society, and advocate for a sovereign digital model.
In all these domains, the impending regulations should equally address AI and Web3, or more optimally, orchestrate their collaboration.
On June 14, 2023, European Parliament representatives solidified their position on AI legislation. Deliberations with EU member states within the council about its final shape are now in progress. This regulation will play a pivotal role in determining the permissible boundaries for this technology and its use.
Forthcoming regulations must address both AI and Web3 in tandem.
However, for regulation to bolster development, investment, and strengthen our digital future, it also needs to incorporate elements that position Web3 as a trusted foundation and synergistic partner to AI.
Without this holistic approach, by separately framing these tools, we risk not harnessing their full potential.