Euro banks worry AI will increase their dependence on US big tech | Hacker News Reader

Euro banks worry AI will increase their dependence on US big tech

theregister.com

22 pointsrntn28 comments

Good thing the EU didn't pass regulations crippling their local AI & ML industry before it even got off the ground then.

Is no European politician talking about why they are absolutely dependant on US Software, US Hardware and US Technology Services, does it raise too many awkward questions to do that?

The European Politician would have to introspect and answer exactly how it is that they add value.

All they can do is enact regulations and decrees in a centralized way like the former USSR.

Also as a entrepreneur in Europe, what incentives are there to create anything. There's the existing crippling regulations, employment laws are tough to try things out and just go bust, and at the end of it all if you're successful, the taxes remove whatever gains you should rightfully get for jumping through all these hoops.

All you have now are $200k designer bag manufacturers because of legacy.

I hope to god they do whatever is needed to keep ASML and the like competitive.

So what are you proposing? Joining the race to the bottom to the Chinese surveillance state? Sell out "OCP"-style to big tech like the US?

I won't propose a solution since I'm not in charge, but my guess for what will happen regardless is the EU outsources its tech innovation to some other place where they can still reap the rewards. Kinda like how they've imported energy from countries with lower environmental standards.

> but my guess for what will happen regardless is the EU outsources its tech innovation to some other place where they can still reap the rewards.

The AI laws don't work that way. Just like Google can't say: "We'll just put all of our servers in the US so we don't have to comply with the GDPR and start serving the EU market".

> Kinda like how they've imported energy from countries with lower environmental standards.

That doesn't happen. Importing energy from another country doesn't make any difference for a countries emission rights and second of all the energy grid of the EU is connected only in a very limited way to countries outside the EU (like Turkey).

Other way. An EU-based or EU-related business can serve non-EU customers differently.

I'm referring to natural gas and other energy, not the electrical grid.

(or it can serve EU customers but be offshore enough that it's not subject to EU countries' labor laws or taxes)

> AI laws don't work that way

The companies being in America and selling demanded services in the EU will force the laws into one configuration, whether through lobbying by customers or direct pressure from the U.S.

I’m not seeing, for example, any effort to comply with EU regulations among any of the smaller AI startups, most of whom have customers in the EU. (Which is rational. Once they get bigger they can weigh fines against exiting the market. And if it becomes widespread, it can escalate to a political priority for State.)

> Joining the race to the bottom to the Chinese surveillance state?

Look up chat control and Digital Services Act.

Could you name some of those crippling regulations you're talking about? Just so Im better informed as a european

Their proposed solution will be to regulate AI

What problem do you believe that present regulations impose?

At present, I see the thing preventing European LLMs as mostly being that there is less access to capital for computing resources and the cost of computing resources.

The US is very dominant in computing, it's a matter of history and the EU is a very recent thing. We don't have an Intel, or NVIDIA, etc., yet, and we may not have one for many years, but are established in the parts of the industry where we happen to be so.

None of this has to do with regulation. But we do absolutely need some kind of hardware program to make European vector/tensor processors, something like the European processor initative, but willing to sell to whoever will buy and not just to existing supercomputer customers. Maybe they're even planning something of that sort.

But the problem isn't regulations.

What filereaper said. The taxes and labor regulations alone make the risk vs reward not make sense for tech startups, and that's without getting into explicit tech regulations.

The taxes are a huge problem. The labour regulations, I think less so.

The taxes on wage income are why you can't get two European engineers for the price of one American engineer, and are I think, why there hasn't been a software industry exodus to European, or a European software explosion.

If you could actually pay out what people bring in, I think we'd had an enormous software industry, because the jobs would have been so attractive. The typical European tax on wages isn't an obvious crisis when companies use capital, but when what's productive is labour itself, then it is.

> taxes are a huge problem. The labour regulations, I think less so

I’d invert this. Taxes aren’t a huge issue for start-ups. Not being able to pivot by changing team composition is. Add to that the random EU-specific AI regulations, and it becomes a clearly second-tier place to launch from unless you have the political connections to land national champion status, e.g. Mistral.

I wouldn't say it's mainly the taxes either, except that every startup's lifeline is the potential of future acquisition, which taxation might hurt.

https://en.wikipedia.org/wiki/ASML_Holding

This is a very solid base to start from. "As of 2023 it is the largest supplier for the semiconductor industry and the sole supplier in the world of extreme ultraviolet lithography (EUV) photolithography machines that are required to manufacture the most advanced chips."

It's a great company, but it's a basic technology firm, which is pretty typical for the kind of industry that have traditionally been viewed as sensible in Europe. Such industries are subject to business cycles, i.e. the classic problem with machine tools, so people in these businesses need to think differently about what is good and bad, and what is sensible.

The companies that compete in AI are companies that use the products of the companies that use the products of these companies, and the foundation doesn't really have much to do with what's built on top of it.

If we want microchip manufacturing the thing we'd build on top would probably be NXP, but I don't think we really want microchip manufacturing unless we want to do something special. I don't have a problem with what I hear about TSMCs prices, they sound alright.

What's interesting to me would be if there was some effort to make European DL/floating point maths accelerators for sale to the general public, to rid of the world of NVIDIA's margins, so that more people can have access to such machines, and then presumably, once compute were cheaper it'd be easier to have a compute intensive AI firm in Europe.

AI companies in the US are mostly startups. ASML goes back to Phillips, which is over a century old and has moved into semi conductors very early. What ASML does is push a the technological boundary of an industrial process, which requires enormous R&D. You can find many such companies in the EU.

The EU wants large corporations to do innovation. The US allows startups to do that, the consequences are pretty obvious.

>But the problem isn't regulations.

The problem absolutely are nonsense. In the US and many other countries you can near instantly found a company, raise capital, hire staff and develop a product. Doing the equivalent in Germany will take you years. The regulatory burdens on the individual who wants to found something are immense, opaque, heavily gate kept and require detailed and nuanced understanding of the law.

The EU and especially Germany does not want startups to exist, they want innovation to come from large multi national corporations. The consequence is that they are falling behind on every technological metric.

>Is no European politician talking about why they are absolutely dependant on US Software, US Hardware and US Technology Services, does it raise too many awkward questions to do that?

I have no doubt they are. But it is extremely hard to admit that you yourself have caused these problems. Maybe it can be fixed by regulating more.

Can someone explain like I'm 5 as to why AI is so important in banking? In my experience, AI seems kinda... dumb. Why implement it in the financial sector? I understand the deal with bidding for stocks and stuff, but that's been around for at least a few years now, if not longer.

What is it that the EU is afraid of here? Why is AI so important?

A ton of stuff in banking is based on soft logic and human intervention. My first guess would be fraud detection.

False detection rates suck enough - I can't imagine how awesome hallucinated fraud detection will be.

They're probably already using ML for this, just older forms of it.

I would say almost certainly. I worked for a large insurer a decade ago and they were using ML models for predicting some kinds of home insurance risk (I want to say earthquakes and maybe flooding, but it wasn’t my team and it’s been a decade).

Get BBVA USA branch, no hallucination needed, their system marked any use of their payment cards as a fraud. Useless bank.

I mean, if you regulate before anything takes off you get what you deserve.

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