Microsoft Backs EU AI Code While Meta Rejects It

Tech giants have shown a divided response to the European Union's newly proposed voluntary code of practice on artificial intelligence, with Microsoft expressing support while Meta has chosen to reject it. Microsoft's endorsement of the EU's AI code signals a willingness to engage with regulatory frameworks aimed at ensuring the ethical and responsible development of AI technologies. This move aligns with Microsoft's broader strategy of advocating for balanced regulation that fosters innovation while addressing societal concerns.

Microsoft's President, Brad Smith, commented on the company's intention to sign the code, stating, "I think it’s likely we will sign. We need to read the documents." This stance contrasts sharply with Meta Platforms, which has already dismissed the EU’s guidelines. Meta's global affairs chief, Joel Kaplan, argued that Europe is taking the wrong approach to AI, claiming that the code creates legal ambiguities for model developers and imposes requirements that extend well beyond the AI Act. Meta's decision to reject the code underscores the growing tension between US tech giants and European regulators over digital governance.

The European Commission released the General-Purpose AI (GPAI) Code of Practice on July 10, aiming to offer legal clarity to signatories and encourage the industry to comply with the AI Act, which was first instituted in 2024. Signatories of the code are required to provide summaries of their AI training data and adopt measures to comply with EU copyright rules. Companies like OpenAI and Mistral have already signed the code, while ASML Holding and Airbus have written to the EU asking for the code to be put on hold for two years.

Microsoft's support for the EU's AI code is part of its broader investment in artificial intelligence. The company is planning to spend about $80 billion on data centers to train AI models. However, Microsoft is also set to reduce its workforce significantly, with plans to lay off 15,000 workers this year, over 4% of its workforce, most of them from its Xbox video game division. Several game projects have already stalled due to the job cuts, including the Perfect Dark reboot and Everwild. The company has asserted that its use of AI tools internally enhanced productivity across sales, customer support, and software development. Chief Commercial Officer Judson Althoff claimed the firm realized over $500 million in call center savings and improved employee and customer satisfaction. The firm also said it will utilize AI for interactions with smaller customers. Moreover, the company is using AI to get new codes for products. About 35% of the code for new products was produced by AI, significantly accelerating product releases.

Last year, Microsoft appointed British AI pioneer Mustafa Suleyman to lead its AI operations. It also poured in a sizable investment in OpenAI, the ChatGPT maker, though recent reports point to increasing tension between the two. Microsoft's endorsement of the EU's AI code positions the company as a leader in responsible AI development, demonstrating its commitment to adhering to regulatory standards and promoting ethical practices in the industry. Meta's rejection of the code, however, exposes the company to potential legal challenges and enforcement actions from the EU AI Office. The company's decision to forgo the voluntary code could be seen as a defiant stance against regulatory oversight, potentially leading to increased scrutiny and legal risks. Meta's refusal to sign the code also raises questions about the company's commitment to ethical AI development and its willingness to engage with regulatory frameworks aimed at promoting responsible innovation.

The divergent responses from Microsoft and Meta reflect the broader debate within the tech industry over the role of regulation in AI development. While some companies, like Microsoft, see regulation as a necessary component of responsible innovation, others, like Meta, view it as a potential barrier to growth and innovation. The EU's AI code of practice represents an attempt to strike a balance between promoting innovation and ensuring the ethical and responsible development of AI technologies. However, the differing responses from tech giants highlight the challenges of achieving consensus on AI regulation and the need for ongoing dialogue and collaboration between industry stakeholders and regulators.