Crafting an AI Compass: The Influence of Global AI Standards on Firms

Abstract

We investigate the technical and ethical standardization of artificial intelligence (AI) and its corporate implications around the globe. We show that AI standards not only fuel AI investments but also broader capital and R&D spending. Standardization of machine learning methods, programming languages, protocols for big data, guidelines for data interchange, and interoperability of industrial data encourage investment. Conversely, frameworks for societal and privacy considerations in AI discourage investment. AI standards have a positive ripple effect on firm value, gradually amplifying as the standards mature and their impact on firms deepens.

Keywords: Artificial Intelligence, Standard Setting, Investment, Technology Diffusion, Machine Learning, Big Data, Ethical AI, AI Safety, Privacy, AI Regulation

JEL Classification: D22, E22, O30, O32, O33, K20