Key Figure Assisting Meta, Google, and Amazon in European Law Preparation in 2023.
Gerard de Graaf’s transition from Europe to San Francisco about a year ago brought a notable shift in his professional role. With three decades of experience at the European Commission, de Graaf undertook the task of revitalizing the EU office in the Bay Area.
Holding the position of senior envoy for digital to the U.S., his primary responsibility since September has been aiding the tech industry in preparing for the forthcoming legislation, the Digital Services Act (DSA), set to take effect on Friday.
Upon his arrival, the buzz around the metaverse had surpassed that of artificial intelligence in the tech landscape. Concurrently, major tech players and emerging startups grappled with significant job cuts, while the Nasdaq index was on track for its most challenging year since the 2008 financial crisis.
In de Graaf’s realm of influence, prominent companies, including Meta, Google, Apple, and Amazon, had from April to gear up for the DSA, which draws inspiration from banking regulations.
Failure to comply with this act, introduced in 2020 by the European Commission (EC) to curb the proliferation of illicit online content and establish greater accountability, could result in fines amounting to 6% of their annual revenue.
De Graaf, stepping in as an envoy, encountered more dynamic developments than anticipated. March witnessed the unexpected collapse of Silicon Valley Bank, marking the second-largest bank failure in U.S. history.
Concurrently, OpenAI’s ChatGPT service, unveiled the previous year, triggered an intense race in generative AI. Tech funds flowed into novel chatbots and the large language models (LLMs) powering them.
From his office co-located with the Irish Consulate on the 23rd floor of a San Francisco skyscraper, de Graaf termed the year as “strange in many, many ways.” It marked the European Union’s renewed formal presence in Silicon Valley after an absence since the 1990s.
Much of de Graaf’s time revolved around interactions with high-level executives, policy teams, and technologists from major tech firms. Discussions encompassed regulations, the repercussions of generative AI, and competitive dynamics.
Despite laws being enforced by the EC in Brussels, the new outpost facilitated improved ties between the U.S. tech sector and the EU.
According to de Graaf, a crucial dialogue that needed to be improved has gained momentum.
He wryly remarked that during the internet boom, a time of Silicon Valley‘s ascendancy, a decision to step back from the region was taken just when the EU’s presence could have been impactful. Back then, the tech industry’s sentiment was that the rapidly moving internet realm was beyond policymakers’ comprehension and regulation.
Nevertheless, de Graaf highlighted some tech leaders have genuinely committed to understanding the DSA. Meta’s CEO, Mark Zuckerberg, engaged with EU Commissioner for Internal Market Thierry Breton to delve into specific aspects of the regulations. Similarly, X (formerly Google X) proprietor Elon Musk openly endorsed the DSA following a meeting with Breton.
De Graaf noted a perceptible shift towards appreciating and comprehending the EU’s standpoint, particularly in the aftermath of advancements in generative AI. Formerly known as Twitter, X had opted out of the EU’s voluntary guidelines for combatting disinformation, though no penalties were imposed for non-participation.
However, the company, now operating as X, must align with the Digital Services Act (DSA) and its stringent regulations. Following a meeting with Elon Musk, EU Commissioner for Internal Market Thierry Breton indicated that combating disinformation would evolve into a legal obligation.
Gerard de Graaf remarked on the significant dedication of major companies in Europe and globally towards readiness and compliance. The DSA introduces new mandates for platforms boasting at least 45 million monthly active users within the EU.
These mandates encompass providing risk assessment and mitigation plans and facilitating specific researchers’ inspection access to their services to identify harms. Additionally, platforms need to enhance transparency for users regarding their recommendation systems, even allowing users to customize their settings.
Nevertheless, the timing could prove challenging. As part of their cost-cutting measures early in the year, several companies downsized their trust and safety teams. De Graaf pondered whether these companies could implement the new regulations. Assurances from many of them suggest a renewed focus on trust and safety amidst layoffs.
De Graaf clarified that the DSA doesn’t mandate a particular number of trust and safety personnel; adherence to the law is the primary requirement. However, he did mention a social media platform (unspecified) that raised concerns.
When asked about monitoring disinformation in Poland during the upcoming October elections, the venue, with only one person in the region, provided an answer that could have been more reassuring.
Hence, the regulations emphasize transparency concerning platform actions. A significant knowledge gap exists, particularly regarding content moderation practices. De Graaf questioned the resources involved and the decision-making process for content retention or removal.
De Graaf, a Dutch national married with two children, boasts three decades of expertise in regulatory affairs for the European Commission. He contributed to shaping the Digital Services Act and Digital Markets Act, legislation that enhanced consumer rights and protection while fostering competition.
His prior experience includes a stint in Washington, D.C., from 1997 to 2001 as a trade counselor at the European Commission’s Delegation to the United States.
Contrary to the prevailing notion of San Francisco’s “doom loop,” de Graaf perceives a distinct level of vibrancy in the city and Silicon Valley further south. He finds the energy and dynamism captivating and encounters many intriguing and innovative individuals.
He underlined the enriching conversations held with avant-garde figures in Silicon Valley and San Francisco, highlighting the reward of engaging with the people driving these pioneering companies.
Arriving in San Francisco last September, de Graaf encountered an unfamiliar concept: generative AI. Now, this topic dominates discussions at tech events and social gatherings.
The rapid rise of generative AI has prompted prominent tech firms and executives to call for regulations due to its potential societal and economic impact. In June, the European Parliament made significant progress by advancing the EU AI Act, a package of AI regulations.
Although it’s a long road to becoming law, de Graaf highlighted the irony of the industry’s stance. Companies that criticized the EU for excessive regulations are now questioning the delay in regulatory actions.
De Graaf anticipated an agreement on the regulatory text by year-end, followed by transitional periods for industry and regulatory preparation, possibly lasting one to two years. The evolving landscape of generative AI complicates swift regulation formulation.
Initially, the focus was on legislating the dominance of a few powerful companies, but the proliferation of powerful Large Language Models (LLMs) available for free distribution widens the scope.
De Graaf engaged with local universities like Stanford to understand LLM transparency, researcher access, and data sharing with lawmakers. In Europe, a concept gaining traction is publicly funded AI models, aiming to distribute control away from large U.S. firms. De Graaf acknowledged that global policymakers are grappling with these complexities, needing a crystal ball to predict developments.
While possibilities exist to diversify AI model development, the direction of funding towards processing power is evident. Nvidia, a leader in providing chips for generative AI systems, reported solid earnings and a tripled stock value.
De Graaf’s team frequently interacts with Nvidia and its policy team to grasp the evolving semiconductor market and technological trends. He praised Nvidia’s advanced technology, positioning it uniquely.
De Graaf’s insights from Nvidia are valuable for understanding industry trends and rapid advancements. He acknowledged industries that are proactive in embracing new technologies, providing critical information for policymaking.
