The Implications of Data Privacy Regulations on AI

Investment in artificial intelligence (AI) is growing, with 60% of adopters raising their budgets 50% year over year, according to Constellation Research. But working with AI under emerging privacy standards is complex, requiring a dynamic balance that allows for continued innovation without misstepping on regulatory requirements. Under privacy regulations, businesses are responsible for gaining consent to use personal data and being able to explain what they are doing with that data. There is a real concern that black box automation systems that offer no explanations and require the long-term storage of large customer data sets will simply not be permitted under these regulations.

Data regulations often have a negative connotation for companies, but with AI, the regulations could have the opposite effect. Despite the concerns, companies of all sizes are improving predictive analytics, machine learning and AI capabilities due to enforced data regulations. In reality, data privacy creates real opportunities for better AI and outcomes from all the hard work that goes into creating these systems.

Everyone wants to automate, but the foundation around doing this well is having quality data, and that begs the question of whether CIOs are getting the full ROI out of their investments in these technologies. So many people are talking about how to fix the “garbage in, garbage out” scenario, but hardly any are actually making moves to curb it. That is, until data privacy regulations such as GDPR were introduced.

Privacy regulations help companies drive a data quality program to leverage more advanced technology. For most companies, data quality is the one thing that they never get around to. Regulations force them to make it a priority, helping them to better understand their data. CIOs are taking advantage of this opportunity to better map and find quality data that will help build their AI programs.

Some IT leaders fear that this effort will be all for nothing as more regulations build and shift in the U.S. and across the globe. However, AI likely will not become regulated under privacy legislation because it will always go back to the foundation of data.