Tighter AI data rules could curb Germany's economic gains by €155 billion a year, study finds

Stricter AI Data Rules Could Cost Germany €155 Billion Per Year, Study Warns

Impact of AI Data Regulation on Germany's Economy

Oct 13 (Reuters) - Germany could miss out on €155 billion ($173.43 billion) in additional annual value added if access to AI training data becomes more restricted, the influential German economic research institute ifo said on Tuesday. 

The findings come as European policymakers and technology companies grapple with how to manage the risks posed by AI without slowing innovation, as the region seeks to catch up with the United States and China in developing advanced models.

Potential Economic Gains and Losses from AI

• Generative AI could add €440 billion a year to Germany's economy by 2034, but restrictive access to training data would reduce that by €155 billion, ifo's study found.

Breakdown of Projected Losses

• The loss would stem from slower AI adoption (€45 billion), weaker models (€75 billion), lower research output (€25 billion) and reduced AI development in Europe (€10 billion), according to ifo's model calculation.

Expert Opinion on Data Access

• "Anyone who wants a leading European AI model cannot at the same time make access to training data unnecessarily complicated. You cannot have both," ifo expert Oliver Falck said.

Policy Recommendations and Regulatory Concerns

• The authors urged policymakers to preserve the EU's text-and-data-mining exemption for commercial uses, while introducing proportionate transparency requirements and a practical opt-out standard, and said regulatory uncertainty was already deterring investment in Europe.

Recent Criticism of Government Spending

• The Munich-based institute has recently criticised the German government for using debt-financed fiscal leeway intended for infrastructure and defence spending for other purposes.

Exchange Rate Information

($1 = 0.8937 euros)

(Reporting by Cian Muenster, editing by Izabela Niemiec)