WASHINGTON AI NETWORK PODCAST TRANSCRIPT HOST: TAMMY HADDAD GUEST: BEN BRAKE, JULY 11, 2024 WASHINGTON, DC EPISODE 23

Tammy Haddad: [00:00:00] Good morning, everyone. And welcome to the Washington AI Network and the House at 1229. I'm Tammy Haddad. I'm very excited to introduce you all to a very special guest. Ben Brake. Ben is the Director General at the Federal Ministry for Digital Affairs and Transport in Germany. Tammy Haddad: Ben, it's so good to have you here in Washington, D. C. Thank you, NATO. And thank you, by the way, Julian Ramirez, a friend of the Washington AI Network, being such a great advocate for Germany. Okay, Ben, welcome to D. C. And we've got to, you've got to help us all out here because we don't know the German government that well. Tammy Haddad: We're going to talk about AI, but can you tell us? How is your office is set up and then get us into your priorities. Ben Brake: Absolutely. Thank you very much. Thank you very much for having me. It's an honor. Actually, this is the first meeting here in DC. So this is actually the kickoff of all the meetings I will have in the US, both in New York and here in DC. Ben Brake: Yes, it is. I would. Probably [00:01:00] saying it's probably complex how a digital policy is set up within the German government. We have probably at least three ministers that deal with digital policy and also with AI. That is the ministry for interior, the ministry for economic affairs and climate action, and my own ministry, the ministry for digital affairs and and transport. Ben Brake: So when it comes to AI, I would actually hope that all ministers in the government would consider themselves as being digital ministers. Because AI is actually affecting so many aspects of life, so many different industries and so many public services as well. So what we are doing in the ministry is to focus on at least two things. Ben Brake: First of all, we are responsible for international AI policy. So we are covering OECD processes, G7 processes. G20 processes. Now that might sound a bit boring because it's not, I would say, so much tangible issues going on there. So there's no laws, there's no guidelines, so we're talking more about [00:02:00] resolution. Ben Brake: But the thing is that the way we talk about AI and the way we assess AI will later on frame the decisions and the concrete laws actually we will pass. So we are focused very much on international AI policy. But then again, we're doing a very tangible thing. We are, against the background of the AI regulation we have in the European Union, we are helping small and medium sized companies, of which we have many in Germany, because they are considered to be the backbone of the German industry, we are helping them actually to deal with the regulation coming out of the European Union and making the most out of it, so it's beneficial for their business. Ben Brake: So we're doing two things. We are actually focusing on international negotiations on AI, but then we're trying actually to help. Companies that are in need of help, actually of these that are in desperate need of help, because they're dealing with a lot of concerns, with a lot of challenges currently. Ben Brake: Energy prices, a lack of qualified workers, [00:03:00] inflation, and now data and AI comes on top of it. They need assistance from the state, and the ministry that I represent is actually in charge of actually providing this assistance. Tammy Haddad: So what else can you do? You're talking about very specific, very big issues, workforce, et cetera. Tammy Haddad: So is that funding? Ben Brake: It's fun. Funding is one thing, but honestly, if you ask me if funding should be a priority, funding schemes are very often a sign of inadequate policy because with the funding actually, and the programs you're setting up, you're actually trying to save. To tackle and to address shortcomings of legislation processes, especially of processes that might not be clear for enterprises. Ben Brake: So what we are now doing is very concrete. The AI Act actually defines different levels of security, different levels of [00:04:00] regulation of documentation you have to face with. So if it's high risk AI, there's of course a lot of documentation going on, a lot of certification, a lot of standardization. Ben Brake: I have a background in industry. I worked 10 years for IBM. I always thought that companies don't want that much of, that much regulation. But that's not true because when it comes to AI, everyone wants to know, is the service secure? Is the product I bring into the market secure? Can I really sell it? Ben Brake: So that's where we're coming in as the ministry. So beneath the level of high risk where we have a lot of criteria and we are developing together jointly with the industry certification guidelines, standards actually, so that they can actually be reassured that the services and the products, both standalone products, but also integrated AI systems. Ben Brake: are safe and secure before they actually bring it into the Tammy Haddad: [00:05:00] market. So let's go back to the EU AI act. Okay. So you're trying to develop as much innovation as possible and help these medium level companies, right? And then you've got the EU act. How does that go together? Ben Brake: Actually the AI act from the European union is designed and supposed to support business. Ben Brake: It is supposed to provide guidelines. Standards to bring products and services into the market. But with every new technology comes new challenges. I briefly touched on the lack of qualified workers, which is particularly true when it comes to data. The labor market for data scientists, it's basically empty. Ben Brake: By the way, not only in Germany, but I think that is a challenge as well. pretty much around the world except for India and the United States. But it is very challenging in the European Union. So the role for the state to play here, and I say this as a liberal, is to support business, actually so that they be able to be [00:06:00] innovation, that they could provide innovation and that they could provide innovative products to the market so that actually the European Union as a place to do business. Ben Brake: But also as a place actually to explore products and services could thrive. Tammy Haddad: So how are you working with other countries? Ben Brake: With other countries we're working jointly in the international sphere. We're working very closely with the G7 partners. With the G7 partners we need to focus on a, how to say, value driven approach when it comes to AI.[a] Ben Brake: So we need to make sure that our western values are mirrored in the AI systems and services we are actually developing. And that is why we came up with a code of conduct on generative AI. You know that, that was all over the place last year with ChatGPT entering the market and with how to say, a very, the, with a very tangible offer for each and everyone actually to use AI as a system to [00:07:00] interact with. Ben Brake: And so that was all over the place and it was all over the political discussion. So it was, how to say, the last year of the negotiations of the AI Act and the focus was suddenly only on generative ai. And I always try to explain that it is only a part of ai, especially when it comes to the German market for example. Ben Brake: We are putting, the industry is putting a much more focus on, how to say, like improving their services and products with the integration of AI technologies, not so much with standalone systems, but it was also a discussion going on at the G7 level. So we came up with a code of conduct. We say that there has to be some safeguards for generated AI, such as watermarking, for example, which by the way I learned it's not that simple to do. Ben Brake: And so we came up with the, it called the Hiroshima code of conduct. In the G7 because it was under the Japanese presidency. So what we're now trying to do next is actually to do two things. We would like to broaden the countries that [00:08:00] actually support this code of conduct.[b] We're doing pretty well so far. Ben Brake: But of course, since we are on an international level, and I already said that the results of international negotiations are not so tangible. It's more that we agree on what are the challenges and what would we in principle like to do. do. We of course need to institutionalize this code of conduct to a certain degree so that actually the European Union but also other jurisdictions can learn and can work with it. Ben Brake: And this task we would like to, we would like the OECD to do because the OECD actually brings together the open democratic economies and that might be, since it's also designed as a think tank that might be actually the place to, to institutionalize the code of conduct for you[c]. And one last thing with the OECD is it has this mechanism to work with affiliated countries, which is very important when we look to the global south. Tammy Haddad: That was what I was going to ask you. What about the rest of these countries? How do you integrate? What you're [00:09:00] talking about is very specific. And the Europeans, right? You guys have this: you've defined AI more than anyone. I talk to U. S. government officials all the time. And I'm like, you need a pyramid like the Europeans. Tammy Haddad: You need. Some sort of, actually Shane and I have talked about, you need some sort of design or some way to define it so people can have a conversation, regular people can have a conversation, including policy leaders or people we want to legislate, at least here in the U. S. Ben Brake: Thank you very much for mentioning this. Ben Brake: This is well known internationally as the Brussels effect so the European Union, we in Europe, we are very good on, and I say this without irony, because very much. Very often, political decision makers are being blamed for being too slow with regulation. Innovation is always faster. It's good that innovation is fast, but it's not really true for, like, when it comes to all the data issues, the AI issues, cloud issues. Ben Brake: When you look, for example, at the whole regulatory landscape in the European Union, [00:10:00] everything we have on the table, everything that regulates data, cloud, security, AI it's younger than 10 years. So we started not only 10 years ago, actually, to come up with this. And the Brussels effect means that actually the whole, as you said, Tammy, the whole world is actually looking to the European Union of how it is regulated.[d] Ben Brake: So I would not necessarily agree to, I would say, the assumption that they are all copying it. Ben Brake: They're learning from it. They're Tammy Haddad: not here. They're learning from it. Ben Brake: They're learning from it. We have a, on the, how to say, on the DSA, that is the Digital Services Act, Holding platforms accountability for the content shared on the platforms.[e] Ben Brake: We have a strong interest, for example, from the Brazilian government, they would like to learn from us. How actually did we do the job with platforms and the same is true for AI. Tammy Haddad: And is that all personal relationships? Or is it companies, is it Microsoft saying, listen, you guys gotta help us out and go talk to the [00:11:00] Brazilians and make it better. Tammy Haddad: How does that work? Ben Brake: Well It's both, I would say. It's, of course, about personal relationships like we are doing here to actually go to the countries, actually to explain what we're doing in the European Union. But it is also about the companies working jointly. And therefore the German government came up with a format called the digital dialogues. Ben Brake: That is something we've set up with a couple of countries beyond the European Union, which we picked and where we work together on the company side, but also bringing together civic society actors. Research and science actors. And of course, we always have a regulatory dialogue about exactly the question of how to regulate and how to approach these new innovative technologies. Tammy Haddad: Okay, China. We got to talk about it. What's your relationship with China? Ben Brake: I'm happy to talk about China. China is a challenge. And this ministry has set up an [00:12:00] institution or is about to set up an institutionalized dialogue with China. Tammy Haddad: What's an institutionalized dialogue? I'm not a diplomat. Ben Brake: Basically that you have fixed dates where you actually can talk about stuff and it's not so much that you're doing this on an ad hoc basis that you're going there when there's a problem or you're not going there when there's a problem but you have fixed, you have a fixed date and you're talking about the things that are actually important to both sides. Ben Brake: Now when it comes to the German side. For Germany, China is a rival, as we describe in our China strategy, but it is, of course, also a market and not only for the automotive industry, by the way, it is also for the chemical industry, it is important. So it is an important market for us. Ben Brake: And there are challenges, especially when it comes to data driven business for the companies in being active in China. And the only thing we do is We are setting up a digital dialogue, also with China, if you would like to call it like this, [00:13:00] where we actually set a framework to discuss challenging issues such as sensitive data and the question, what data is allowed to leave the country and vice versa. Ben Brake: And we haven't come up with any solutions yet. And we are just like, just would like to have a fixed institutionalized dialogue where we can address these questions. Tammy Haddad: And what have you heard from China so far? Ben Brake: They we just signed the memorandum of understanding two weeks ago. Tammy Haddad: But they want to cooperate. Tammy Haddad: They want to work together. And why do you think that is? Ben Brake: I think it's also because they figure that the European Union, or both, is also an important market. If you follow the how to say, the European championships on football, when you look at the advertisements there, and there are many Chinese companies, such as Alipay or BYD, Actually promoting. Ben Brake: They're promoting, by the way, for services and products you can't even buy. But now they're getting familiar with this. And why are they doing [00:14:00] that? Because they actually plan to export it. BYD cars are on the street. I myself, I drove an Aura car just lately. So they are also interested in understanding what is our approach to data, because they would like to export these products to the European Union. Tammy Haddad: And where do autonomous vehicles stand in Germany? Ben Brake: We have a regulation in place that allows for a level 4 autonomous driving, so that is completely autonomous. And if you would like to actually bring a car into the market, we have standards for that, you can go for that. Tammy Haddad: And where does the data go? Ben Brake: The data goes, that's a question of the, how to say the business model of the car manufacturer and the companies. That are actually working together with them. So it's basically the suppliers that supply, for example the systems in the car and that actually hangs on them. Ben Brake: And of course there's legal framework, [00:15:00] there's framework, especially on, on personal data with personal data is allowed to go and we're not that we have adequacy decisions from the European Union with certain countries, China is not amongst those. And so personal data is not allowed actually to be transferred. Ben Brake: Okay, Tammy Haddad: Let's turn to elections. What have you learned from elections, disinformation, et cetera? What have you learned from the elections that have already taken place, say, India, et cetera? Ben Brake: Yes. There have been there have been, especially Ben Brake: of the European Union, because that was the last big election in the EU, that there might be interference by actors that would actually like to manipulate this election. By infringement or by setting up campaigns like with fake news and disinformation. The European Union has the Digital Service Act which I briefly already mentioned in [00:16:00] place and that is actually to tackle disinformation. Ben Brake: So also here you can see a bit of a risk based approach like in the AI Act because the European Union defined so called very large online platforms, the so called VLOBs. Those are basically platforms with more than. Forty five million million users in the European Union. Basically all the networks and all the social media apps you have on your mobile phone. Ben Brake: And they need to come up with measures against the proliferation of disinformation, of fake news. Illegal content is an, is another issue because there we have already there we have already safeguards in place, but they need to tackle that as well. And then you need to be transparent. They need to get engaged in a dialogue with the European Commission like actually showing you what they are doing. Ben Brake: I had a discussion the other day where I was asked, is this enough? Are you doing enough? And I said we have this in place for a couple of months now, or only. And we need to be a bit more patient, [00:17:00] because these are all, of course it is sensitive in a way that of course infringement with election is a crime and it is sensitive and it can manipulate people. Ben Brake: But on the other hand, the social media platforms are deciding what is, illegal content is very clear. But what's fake news? What is disinformation? It's a blurry line. So we're giving that to private sector actors, actually, to make a decision. And we need to be very cautious that they are not doing some kind of overblocking. Ben Brake: For example, there are platforms now that are saying, We don't do anything around political advertising. We're just not doing it. You can seriously discuss whether or not this is a good thing, because actually the dialogue is taking place. Young people are using these platforms. The people are there. Ben Brake: Should we have the political debate against this? This is international gloomy background, also where the people are. So we need to be patient with these kinds of issues because we have regulation in place and let's wait to see how this turns out. Tammy Haddad: Before we go, [00:18:00] there's a lot of talk in Washington about the German company, AI company housing. Tammy Haddad: Are there other companies that you'd like to tell us about and specific things they're doing in AI, anything you want to highlight? Ben Brake: Thank you very much. That is, that's a great question because very often the European Union is seen as a place where regulation is taking place, but not so much innovation. Ben Brake: And I would like to invite each and every one to actually change their perspective. There are so many great scientists in the European Union that are responsible and driving, actually, the international AI debate. We have so many great people that are actually contributing to things like ChatGPT. And we have, as you said, we have startups and scale ups, I would already say. Ben Brake: Helsing is one of them, but also Mistral, for example, in France. We have Alep Alpha in Germany that are both coming up with large language models. Tammy Haddad: Yeah, tell us more about that company. Ben Brake: About an alpha Yes that is a startup in Germany actually. They raised [00:19:00] 500 millions in the last round and VCs are very engaged in this company, but as well. Ben Brake: And the thing is we should have a European perspective on that. We should not so much say that others are a German company, that is, a French company, but we should have a European perspective on that. We should establish a cluster actually. And that brings me perhaps to the last point, we need to make sure that we have a real digital common market in the European Union where you can actually scale up, where you don't have different interpretations of one on the same law, like the data protection regulation or the DSA or the AI Act. Ben Brake: So we need to allow for growth when it comes to innovation, innovative German, French, Spanish, European companies. Tammy Haddad: That's great. I hope you're successful in doing that. Ben Braca. It's so great to meet you. Thank you for stopping by the Washington AI Network and the House at 1229. Thanks so much.[00:20:00] Tammy Haddad: Thank you. [a]Good quote [b]Possible inclusion [c]Possible inclusion [d]@tara@frontwoodstrategies.com [e]@tara@frontwoodstrategies.com