Despite attempts to regulate AI through the EU AI Act and state legislation, employees keep resigning from the labs over the labs’ underinvestment in safety. I propose adapting a model from finance called supervised self-regulation (used for stock exchanges and FINRA) to address AI’s regulatory challenges. An SRO of this kind could enable predeployment safety requirements for labs, like mandatory expert red-teaming. The scaffolding is there, but many details on adaptation and governance are still unspecified. I'd welcome comments or suggestions as I try to flesh this out in future work.
Competition is preventing artificial intelligence (AI) safety. Anthropic recently abandoned its industry-leading safety guarantee for new model releases, stating that “[w]e didn’t really feel, with the rapid advance of AI, that it made sense for us to make unilateral commitments … if competitors are blazing ahead.” A company that invests more in safety deploys models later, loses customers, and risks losing the investors it needs to fund compute for the next generation. OpenAI faced the same problem and responded by cutting pre-deployment safety testing time. Effective AI regulation must address the collective action problem at the heart of AI risk.
The SRO would be governed by a board that balances independent directors focused on safety with industry representatives attuned to development speed. Each member firm would hold a board seat, with additional independent directors appointed subject to the supervising agency’s approval. To further reduce information asymmetry, research and safety staff from the labs could be seconded to serve on technical committees writing audit rules. Industry funding would enable the SRO to pay staff market wages without government salary restrictions. Concerns about industry capture of an SRO are real, but any regulatory scheme—including the status quo—faces this challenge. Tech companies already exert enormous influence over AI policy through opaque lobbying; an SRO would replace that with a formal, public process in which the government and outside parties have a structured role.
