Regulating Multifunctionality

Forthcoming in Philipp Hacker, Andreas Engel, Sarah Hammer and Brent Mittelstadt (eds) The Oxford Handbook on the Foundations and Regulation of Generative AI (Oxford University Press) Abstract Foundation models and generative artificial intelligence (AI) exacerbate a core regulatory challenge associated with AI: its heterogeneity. By their very nature, foundation models and generative AI can perform multiple functions for their users, thus presenting a vast array of different risks. This multifunctionality means that prescriptive, one-size-fits-all regulation will not be a viable option. Even performance standards and ex post liability--regulatory approaches that usually afford flexibility--are unlikely to be strong candidates for responding to multifunctional AI's risks, given challenges in monitoring and enforcement. Regulators will do well instead to promote proactive risk management on the part of developers and users by using management-based regulation, an approach that has proven effective in other contexts of heterogeneity. Regulators will also need to maintain ongoing vigilance and agility. More than in other contexts, regulators of multifunctional AI will need sufficient resources, top human talent and leadership, and organizational cultures committed to regulatory excellence. Consider one of humanity's most primal of tools: the knife [30]. The knife is not a singular tool; rather, it comes in many different varieties that serve many functions, each of which can generate value for society. Knives are used in the kitchen to prepare delicious meals, and then they are used by diners to consume those same meals. Knives carve objects, cut rope, and open packages. They clear paths through forests and jungles, and they help in harvesting seasonal crops. Knives can be used, of course, to injure or kill people. But in the hands of surgeons, knives are routinely used to save lives. And even though knives take many different forms and are often designed for many different purposes--think of, for example, the many types and sizes of surgical scalpels, woodcarver's chisels, and kitchen implements, among others--knives designed for one purpose also can be adapted for different uses, as anyone who has used a dinner knife to open a postal letter can attest. Many knives, though, are deliberately intended to serve multiple functions, as is the case with a simple pocketknife or, even more emblematically, the classic Swiss army knife, some models of which boast a combination of more than 30 different tools in one. The proliferation of functions performed by different knives has led over the years to different forms and sources of rules governing their manufacture, sale, and deployment.