India backs down on AI stance, requires government approval to launch prototypes

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India has entered the global debate on artificial intelligence by issuing an advisory requiring “big” technology companies to seek government permission before launching new models.

India's Ministry of Electronics and Information Technology issued the advisory to companies on Friday. The advisory — which has not been made public but a copy of which was reviewed by TechCrunch — also asks tech companies to ensure that their services or products “do not permit bias or discrimination or threaten the integrity of the electoral process.”

Although the ministry acknowledges that the advisory is not legally binding, India's Deputy Information Technology Minister Rajeev Chandrasekhar says the notice “suggests that this is the future of regulation.” He adds: “We are doing this as a kind of consultation today and we ask you to adhere to it.”

In a tweet on Monday, Chandrasekhar said the advisory aims to “bring untested AI platforms online in India” and does not apply to startups.

The ministry cites the power given to it by the Information Technology Act, 2000 and the Information Technology Rules, 2021 in its advisory. It seeks compliance “with immediate effect” and requires technology companies to submit a “case action report” to the ministry within 15 days.

The new advisory, which also asks technology companies to rate the “potential and inherent fallibility or unreliability” of the outputs generated by their AI models, represents a reversal from India's previous hands-off approach to regulating AI. Less than a year ago, the ministry refused to regulate the growth of artificial intelligence, instead identifying the sector as vital to India's strategic interests.

India's move has surprised many industry executives. Many Indian startups and venture capital firms say they are dismayed by the new advisory, and believe such regulation will hamper the country's ability to compete in the global race, where it is already lagging behind.

“I was so foolish when I thought I was going to bring GenAI to Indian agriculture from San Francisco.” books Pratik Desai, founder of startup Kisan AI. “We were training a low-cost multimodal model for pests and diseases, and I was very excited about it. This is terrible and disheartening after working 4 years full-time to bring AI to this field in India.

Many Silicon Valley leaders also criticized India's policy shift. Aravind Srinivas, co-founder and CEO of Perplexity AI, one of the hottest AI startups, said the new advisory from New Delhi was “Bad move by India“.

Martin Casado, partner at venture firm Andreessen Horowitz, He said“Good, Lord.” What a farce.”

This warning comes on the heels of Chandrasekhar expressing disappointment in a Gemini-certain response from Google last month. Last month, a user asked Gemini, formerly known as Bard, if Indian Prime Minister Narendra Modi was a fascist.

In response, Gemini said – citing experts she did not identify – that Modi was accused of implementing policies that some described as fascist. Chandrasekhar responded to the exchange by warning Google that such responses constitute “direct violations” of the IT Rules 2021 as well as “several provisions of the criminal code”.

Failure to comply with the provisions of the IT Act and IT Rules may result in “potential penal consequences for intermediaries, platforms or their users where identified,” the advisory adds.