Technology; Media and Telecommunications Archives

Investing in AI in India (Part 2): Tracking the Regulatory Landscape

Insights | August 28, 2024 | Practice Area: Competition/Antitrust, Data, Mergers and Acquisitions, Regulatory, Technology; Media and Telecommunications

Prospective investors in Indian artificial intelligence (“AI”) companies should familiarize themselves with the Indian government’s initiatives in AI regulation and the direction of future regulation. This note, the second of a multi-part series on investing in the Indian AI sector, outlines some of the key developments in AI in the country. However, it is important to keep in mind that India’s approach to AI governance may change in the future, given the rapidly evolving nature of technology as well as the country’s dynamic regulatory trajectory, including with respect to data, intermediary liability, digital technologies, telecommunications and digital competition, as discussed in this note.

Climate Change and ESG Considerations in India’s AI-Driven Future

Insights | August 14, 2024 | Practice Area: Clean Energy, Corporate Governance and ESG, Regulatory, Technology; Media and Telecommunications

As AI continues to transform industries in crucial ways, the training of large AI models remains highly energy- and resource-intensive, resulting in significant emissions and waste.
For countries and companies which have ambitious net-zero goals, balancing AI ambitions with existing decarbonization strategies is important. As India accelerates its journey towards becoming a global economic powerhouse, it may want to address the environmental implications of increased AI deployment, including by regulating AI with the aim of making increased adoption sustainable. Where companies are concerned, investing in ‘green AI’ will not only benefit the environment but may also enhance their ESG profiles. Going forward, the integration of climate considerations into AI policy is likely to become an important element of responsible AI development.

Investing in AI in India (Part 1): Key Considerations

Insights | July 23, 2024 | Practice Area: Data, Intellectual Property, Mergers and Acquisitions, Private Equity, Regulatory, Technology; Media and Telecommunications

While investments in the AI sector in India present significant opportunities, they also present a unique set of risks within an evolving legal and regulatory landscape.
Before making an investment decision, investors should consider IP issues, data-related rights and compliance, any industry-specific concerns, the then-applicable regulatory framework as well as potential developments in AI regulation. In addition, investors should evaluate operational and contractual arrangements, undertake a technical due diligence, and assess potential liabilities and risks. Such risks include product and professional liability, algorithmic bias and discrimination, cybersecurity and data breaches, market and reputational risks, along with concerns related to transparency and explainability.

India’s New Data Protection Regime: Tracking Updates and Preparing for Compliance

Insights | July 1, 2024 | Practice Area: Data, Regulatory, Technology; Media and Telecommunications

The Digital Personal Data Protection Act, 2023 (the “DPDP Act”), published in India’s official gazette last year, is a new law regulating the collection, storage, use and processing of personal data. The DPDP Act will take effect from the date(s) notified by the Indian Government, and different dates may be notified for different provisions of the DPDP Act. Further, several provisions of the DPDP Act require specific rules which are yet to be notified.
According to a recent statement made by the new union minister of the Ministry of Electronics and Information Technology, the new rules are in advanced stages of drafting and are expected to be released for industry-wide consultation in the near future. Given that both rules and provisions of the DPDP Act are likely to be notified over the next few months, all entities need to check whether and to what extent the DPDP Act applies to them and their operations.
For the purpose of preparing for, and complying with, obligations under the DPDP Act, it would be advisable for all organizations to undertake data mapping exercises and data audits inter alia in order to facilitate the identification and determination of ‘personal’ information from mixed or legacy databases and/or organizational datasets.

AI-Generated Inventions: New Questions for Patent Regimes

Insights | May 29, 2024 | Practice Area: Intellectual Property, Technology; Media and Telecommunications

Since patent regimes around the world are primarily designed to reward “human” innovation, such norms may need to be revisited for the purpose of protecting inventions that are generated by artificial intelligence (“AI”).
In most jurisdictions, existing patent laws contemplate an “inventor” to (only) mean a natural person. Further, recent authoritative interpretations have been reluctant to extend the concept of inventorship to AI systems.
However, with the growing use of AI, modern technology has arrived at an inflection point where an AI algorithm can play a determinative role in the inventive process. Accordingly, the question of granting patents to AI-generated inventions has assumed additional importance, including in terms of incentivizing innovation and investments into future AI models.
Subject to new developments and priorities, legislators may want to consider options such as amending extant patent regimes, introducing a bespoke framework especially for AI-generated inventions, allowing human beings to be named as inventors to the extent of their involvement in the use or development of the AI system concerned, or even doing away with the requirement of naming an inventor for AI-generated inventions.

Opportunities in the Semiconductor Industry in India

Insights | March 18, 2024 | Practice Area: General Corporate, Mergers and Acquisitions, Regulatory, Technology; Media and Telecommunications

Semiconductors or ‘chips’ are the building blocks of electronic devices and are used in a variety of electronic devices from cars to drones as well as smartphones and computers and across various sectors, including the aerospace and defence, telecom and automotive sectors. Currently, a majority of the semiconductor manufacturing market is dominated by countries such as Taiwan, China, the United States, South Korea and Japan. India relies on semiconductor imports from these countries. While the semiconductor manufacturing industry is currently at a nascent stage in India, due to the worldwide shortage of semiconductors, over the last couple of years, India has taken active steps to tap this market.
This note outlines the key initiatives of the Government of India in relation to the semiconductor industry, regulatory framework for investment, setting up operations in India and recent developments/investments in the semiconductor industry in India.

The EU’s New Law on Artificial Intelligence: Global Implications

Insights | February 19, 2024 | Practice Area: Data, Regulatory, Technology; Media and Telecommunications

Pursuant to ‘trilogue’ negotiations among major institutions of the EU, an agreement on a proposed regulation with respect to artificial intelligence (“AI”) was arrived at in Brussels a few months ago, the text of which may be approved, published, and subsequently enter into force later this year. This is the world’s first comprehensive law on AI (the “AI Act”). According to the current draft, the AI Act should apply two years after its entry into force, likely from the second quarter of 2026.
The broad focus of this new law is a risk-based approach, based on an AI system’s capacity to cause harm. Compared to prior legislative proposals, additional elements of the current agreement include rules on high-impact general-purpose AI models that can cause systemic risk in the future, as well as on high-risk AI systems. The AI Act may set a global standard for AI regulation in other jurisdictions, just like the EU’s General Data Protection Regulation (“GDPR”) did with respect to personal information. Moreover, similar to the GDPR, one of the most important effects of the AI Act will be its extraterritorial scope, involving obligations for non-EU businesses as well.

Can Deepfakes be Leveraged Responsibly?

Insights | February 1, 2024 | Practice Area: Data, Regulatory, Technology; Media and Telecommunications

‘Deepfakes’, which involve the creation of highly realistic content (images, video, audio) by harnessing the power of artificial intelligence (“AI”), raise important concerns related to misinformation, identity theft, fraud, privacy infringement and electoral democracy – including as recently witnessed in India via incidents involving media personalities and politicians. However, deepfakes also promise exciting possibilities in various fields and business applications, including for personalized marketing, virtual training simulations and operational efficiency.
As of date, India does not have a specific law to regulate deepfakes or AI. However, certain provisions under the Information Technology Act, 2000 and its corresponding rules (together, the “IT Act”) may be invoked by appropriate authorities in this regard, including with respect to potential misuse and related penalties. In addition, new legislation – such as the proposed Digital India Act and the recently published Digital Personal Data Protection Act, 2023, respectively – which, when acting together, remain poised to overhaul the IT Act in its entirety – may introduce bespoke rules on regulating AI and deepfakes in India.
As organizations navigate this transformative techno-legal landscape, the responsible use of deepfake technology – including through a combined adoption of ethical frameworks, transparent policies, security measures, technical collaborations and awareness campaigns – is necessary to ensure a positive impact on the business ecosystem.

India’s Initiatives on Regulating Artificial Intelligence: Balancing Promotion with Protection

Insights | January 9, 2024 | Practice Area: Regulatory, Technology; Media and Telecommunications

India’s stance on AI regulation has grown more sophisticated over the past few months. On the one hand, the country’s unique requirements have been articulated in respect of making vast datasets available for AI training, as well as to enable rapid AI deployment, innovation and growth. On the other hand, including for the purpose of addressing global concerns (some of which have arisen locally pursuant to recent events like those involving ‘deepfakes’), the government may rely on external influence – such as the risk-based approach contained in a recent political agreement on the EU’s AI Act.
With respect to the latter, new national laws, such as the proposed Digital India Act, may soon establish a concrete compliance framework, including in terms of regulating new technologies, protecting digital users from harm, enhancing intermediary liability, promoting algorithmic accountability and transparency, as well as curtailing monopoly, discrimination and bias. Further, recent reports on AI provide a useful blueprint for India’s long-term vision on AI governance, intellectual property, compute infrastructure and ethical considerations.

Reaching for the Stars: Private Sector Participation in India’s Space Sector

Insights | October 27, 2023 | Practice Area: Regulatory, Technology; Media and Telecommunications

India’s recent achievements in space exploration have garnered significant global attention (e.g., Chandrayaan-3’s soft-landing on the lunar south pole; Aditya-L1’s solar study mission; and hitting key milestones in terms of achieving manned spaceflight capabilities as part of the Gaganyaan project). However, private sector participation in space activities continues to be hamstrung through a combination of: (i) financial constraints (e.g., a lack of access to capital, including continued challenges with respect to securing asset-based financing, such as on account of the mobility of such underlying assets); along with (ii) regulatory ambiguity (e.g., in terms of attributing and quantifying liability, including in respect of third-party liability insurance, as well as with regard to corresponding caps).
Nevertheless, several new initiatives in India hold promise, such as: (i) the Indian Space Policy, 2023; (ii) a stated commitment to increase the country’s global market share, including by moving away from a demand-based model to a supply-centric approach; (iii) the ongoing and time-bound processing of private sector applications (related to space activities) by the Indian National Space Promotion and Authorization Center (IN-SPACe) – a single-window nodal agency – including for the purpose of assisting erstwhile vendors and suppliers to move up the value chain; (iv) the aggregation of user requirements by NewSpace India Limited – a Central Government-owned enterprise – including for the purpose of utilizing new space assets optimally based on determinations of stakeholder accountability, as well as creating new ones based on demand confirmations; along with (v) the launch of the SpaceTech Innovation Network (SpIN) in order to foster entrepreneurial innovation – especially in respect of startups and SMEs.
This note outlines India’s efforts to enhance and improve upon space regulation – including through reforms and liberalization – while also highlighting obstacles in both policy and practice.