Unveiling the Highlights: A Recap of CES, the Global Technology Trade Show in Las Vegas | Akin Intelligence
In this episode of OnAir with Akin, lobbying and public policy partner Hans Rickhoff and senior counsel Reggie Babin lead a discussion with international trade partner Christian Davis, senior policy advisor Virgil Miller, and senior advisor Ryan Thompson to recap their experience at CES, an annual trade show organized by the Consumer Technology Association that occurred from January 9th to 12th in Las Vegas, Nevada. This year, artificial intelligence (AI) was a major theme at the conference, and in this discussion our team delves into how some of the new AI-powered technologies showcased at CES could be impacted by federal policy.
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Episode Transcript
Hans Rickhoff: I am Hans Rickhoff.
Reggie Babin: And I'm Reggie Babin.
Hans Rickhoff: Thank you for joining Akin Intelligence monthly podcast where we talk all things artificial intelligence and policy. We are fortunate to have David Vondle from our IP Practice Group join us last month to talk about intellectual property and copyright and the impact on artificial intelligence. This month we're freshly back from Las Vegas with a full crew from Akin, and looking forward to this conversation. I know you are as well, Reggie.
Reggie Babin: That's right, Hans. We were fortunate to be joined in Vegas by our colleagues, Christian Davis and our Trade and Regulatory Group, and Ryan Thompson and Virgil Miller in the Lobbying and Public Policy Group. And I'm looking forward to recapping that trip and also hearing their thoughts and takeaways.
We were able to experience in real time the technology that we talk about in a more theoretical sense here in Washington as it relates to the policy. So a lot of fun to connect the dots between what's going on in Silicon Valley and out in the world to what we're dealing with on the policy side here in Washington.
Hans Rickhoff: And as a reminder, this podcast is designed to complement all of the materials that Akin puts out related to artificial intelligence and we encourage all of our listeners to sign up for those materials.
With that, we have Virgil [Miller] with us today. And Virgil, you saw a number of things at CES, health care related. And we'd like to know, I guess, first and foremost, what you saw that was most interesting while you were walking the floor, and then your thoughts about where healthcare is in the AI space, and what you see on the forefront. And if you think more regulation is needed, and if some of the legislation out there has any traction moving forward.
Virgil Miller: Let me start out by saying that I've attended CES before, but it has been a number of years. So I have to start out by commenting on how massive the actual conference is, the premier tech Consumer Electronics Conference in the country. I would venture to say that the world, the amount of innovation that is going on out there is just mind-blowing. So it was very good to be there, very good opportunity to spend time with clients, with others who were excelling in this field, and just see the amount of innovation that is going on across many different industries. So to get to your question about the thing that sticks out in my mind, it was during our visit to the showroom floor. I think it was our second day there, and this was the second or third showroom floor that was housed in the Venetian. And one thing that really found my attention and my eye is AARP.
The organization that caters to older Americans in the country has an installation, a very big presence at this conference. And when I initially saw their logo, it struck me as peculiar that an organization that caters to/serves older Americans in the country, they had this major presence at this conference on innovation in tech. It just didn't seem compatible to me in my mind. So I spent time there, was able to dig a little deeper and the thing that sticks out to me is AARP. They have this initiative, “AgeTech Collaboration”, is what it's called, where they focus on seeking out startups that cater to the people that are top of mind for them. So they're surveying the ecosystem, looking for startups that are coming up with innovative ideas and solutions for any number of problems that older Americans are confronted with. Seeking out those startups, testing their products, sharing their products with their membership, but also connecting them with potential investors. So just that whole process, that whole idea, that whole concept is something that was really interesting to me, and something that I'll continue to follow.
Reggie Babin: Yeah. And we spent a lot of time in DC, deeply enmeshed in this AI regulatory conversation and you get all that starts from a position of concern or worry, and trying to stave off the worst case scenarios. But that's a perfect example when you think about previous generations of technology, and maybe a criticism that they were too focused all on consumers in a narrower demographic sect. And this creates an opportunity to address the concerns of a larger swath of society, right, whether it be older American, whether it be other underrepresented groups, and seeing entrepreneurs, seeing companies, seeing the manifestation of this technology as an opportunity, as opposed to a potential societal hazard, I thought was really interesting. Just a different orientation to the technology from the West Coast, versus what we often see here in DC.
Virgil Miller: That's right. Yep.
Hans Rickhoff: Well, Christian, I think it was my first time at CES and I was surprised when I walked on the floor how many autos were there. And not just cars, but the fact that you mentioned AARP, I was surprised to see John Deere there. Autonomous vehicles is an area where I think there's consensus that there needs to be some sort of regulation. I'd be curious, your thoughts in terms of from a transportation perspective, from an autonomous perspective, what you found most interesting, and where you see that either helping move policy at a faster pace, or maybe where you see some potential challenges. And I'll note, autonomy was everything from lawnmowers, to tractors, to earth movers. It was pretty fascinating to see what's on the rise.
Christian Davis: Yeah. Thanks, Hans. One thing that I noticed is that as you walk the floors of CES, there are certain events that have crowds around them. And you look at like, what is drawing in this big crowd of people? And you peer over or weed through the crowd and see what's going on. And I think one of those that really struck me was, there are flying cars that looked like something out of The Jetsons. And that was getting a lot of attention. And you bake that in with, as you mentioned, various industrial equipment, that's autonomous robotics, delivery, all of these various technologies that are running with a fusion of Lidar technology, and other sensing technology, and artificial intelligence. And you see that as something that those tech companies are trying to run as fast as they possibly can to try to innovate, and get to that next milestone in terms of development, and bringing these things to consumers.
Meanwhile, as you mentioned, there are regulatory and policy hurdles that are coming down the line. You can see that whether they're focused on safety issues that might arise, liability in terms of what happens if there's an accident. How is the data that's being used transferred, particularly if it involves any personal data? And I think that and if you layer that on top of a lot of the issues that I focus on in my practice, which are more the international trade, the national security issues, like the tech transfers, and supply chain security, and the foreign investment or CFIUS rules, there's a lot of hurdles out there for these companies to deal with as they try to do business across borders. And I think it's obvious when you look at the community out at CES, and the fact that many of the companies are from outside of the United States that are there, and you layer in these rules that will potentially minimize the ability of companies to collaborate across borders. I think it's a challenging environment.
Reggie Babin: Yeah. That was one of the things that stood out to me, again, coming from DC, where so much of this conversation essentially boils down to a US v. China dynamic. Having that be almost completely non-existent in this space where you have companies, where you have entrepreneurs who are building businesses and just trying to develop the best technology and capture as much market share as possible. It felt like a much less “perilous” dynamic, for lack of a better word. Much more optimistic, much more business oriented. And it was interesting to engage with the technology in a space where it was, no pun intended, somewhat disconnected from the tone and tenor of the conversation in Washington.
Christian Davis: Yeah. No, I agree that in DC, the conversations are much more about what you can't do and the perils, whereas out there it was really tech focused, which I think is refreshing to many of us.
Hans Rickhoff: Ryan [Thompson], I know you also are working a lot in the transportation space, but you're also doing a lot in the defense space. And while defense was not necessarily part of CES with the National Defense Authorization Act passing at the end of the year, first, I’d be curious, your just general thoughts about CES of what stood out to you. And then maybe we can move into, what was included in the NDAA?
Ryan Thompson: Yeah, thanks, Hans. No, I mean I think similar to everybody else, it was an overwhelming experience just to walk the floor and see all the new tech. And as you said, Christian was talking about transportation. Pretty much, it is multimodals an understatement. Maybe every major mode of transportation is covered. You have the AI powered electric outward motors for fishing boats too, I think you mentioned John Deere on AI powered tractors and earth moving equipment. So it's pretty fascinating stuff. I think the eVTOL technology that Christian mentioned, whether that's Archer, Joby or BETA, or any of these companies that are trying to navigate the regulatory framework in Washington right now about self-flying and delivery technology, a lot of those folks are looking to partner with the National Security Defense apparatus, DOD while they're navigating the consumer facing regulatory world.
So it's interesting to see, as you mentioned, Hans, it's not an overtly defense focused event, not like AUSA in Washington, DC, the Army Trade Show or one of those, but there was a lot of defense and national security overlap in terms of the tech that was being showcased. And one thing that I thought was really interesting, I would be curious if other people felt the same way, but there seemed to be this convergence while you're out at CES, where, Christian, you mentioned the Jetsons. But to me, I was struck with CES seemed more like a showroom floor of something you could almost go out and buy in the near future, as opposed to something that's 10, 15 years down the line. So it was fascinating to see how quickly tech is making it into the pipeline.
Reggie Babin: Yeah. And speaking of that, and speed, and quickly available technology, and going back to you, Virgil, that you spent much of your early career as a staffer on the Energy Commerce committee working on healthcare policy. And obviously there are few sectors that are more heavily regulated than healthcare, but also a few sectors frankly, that are more well-experienced at regulating the application of AI. What were your takeaways as someone who's worked in this space for a long time on the policy side, seeing these new and novel applications of consumer-focused healthcare tech, for lack of a better word?
Virgil Miller: Yeah, I did have an opportunity to attend a session. For those who have not attended CES, you should know that in addition to the innovators, the companies that are there showing off their new innovations, there are a number of government leaders and staff who attend the conference and there's a particular panel that sticks out. I believe it was a conversation with commissioners and it was all around AI and essentially how the government is looking at the advent of AI. And this particular panel included the current FDA commissioner and then the FCC commissioner as well. So very robust panel to talk about the various approaches here across the government. As you mentioned, the FDA commissioner obviously was top of mind for me, in my early career I worked on the Energy and Commerce committee, handled FDA policy for the committee. This was 2007. I was dealing with the typical user fee reauthorizations where there was prescription drugs, medical devices, animal drugs.
So dealing with that policy and being able to take my mind back there and see how far FDA has come, not unlike any other segment of the government or society. So the commissioner took us, showed us the arc of FDA's transition here, gave us a peek into their current thinking and understanding as they approach AI and healthcare. To your point, probably the most regulated industry as we talk about AI. But it first talked to us about digital health and the period that we went through where we were talking about smarter homes and different technologies and innovations to make the home smarter and help folks lead healthier lives while at home. You talked about FDA's approach to using new software to look at applications. You talked about the operating room and how new technologies allow doctors to beam in and provide consultation when it comes to certain procedures and operations.
So FDA went through this digital health period and now they're going through this AI machine learning period, and it was just good to see his approach, how they're thinking about it. It is definitely top of mind. They've stood up on the advisory committees to deal with this very specific topic. There is a difference in the approach as it relates to artificial intelligence and locked algorithms versus machine learning and those algorithms that become better with more data, more decisions that are made. But because of just the nature of those type of algorithms, how the two regulate, because these are real-time decisions that are made from more data, real-time data. So how do you in an environment where FDA all day, every day, they're looking at applications for new drugs, new therapies, new devices, and there's a very rigorous process and considering those applications. And then there's a very rigorous process when one change is made.
So how do you, in an AI environment, in an AI world, how do you reconsider applications in the AI context where the machines are learning based on each new scan that they see, based on each new visit where the data is reported? So FDA is, like I said, it's top of mind. It goes all the way up to the commissioner. It definitely has his attention. There are committees that are set up to deal with this issue. So for me, it was from an FDA staffer in 2007 where AI wasn't a worry that we ever uttered, to going from there to the digital health era to the AI machine learning era is definitely something to behold. Very interesting. And to see the number of companies from the big names that we know that are household names to the very names that we've never heard of who are innovating in this space, who are trying to bring tech decisions, offerings, tests closer to the consumer, it's just good to see the whole ecosystem there in one place.
Reggie Babin: Yeah, and one of the names from that conversation I thought was particularly interesting or encouraging, rather, was Commissioner Califf say essentially that the FDA is about half the size it'd need to be to actually get their arms around this problem on their own and it does sort of require collaboration on both to impact the community on the patient side, but also the technology community, the provider community.
I think that is reflective particularly on the issue of AI, of the government industry collaboration that we've seen at least over the past few years that I think is a departure from some of the more antagonistic dynamics that have started to take root as it relates to technology and government in years prior. And so that felt like a continuation of a theme of regulators acknowledging that the technology is advancing very quickly, that it's very highly sophisticated and that there's going to necessarily need to be a collaboration between government and industry to make sure that it's regulated properly to prevent harm, but also not overly regulate it such that we stifle innovation. I think that is a tension that we're going to see worked out for the foreseeable future.
Virgil Miller: It's good to see our government leaders, they see the potential there, they understand it and they definitely want to capitalize on it. But to your point, it's how do we do it in the most efficient way? How do we do it in a way that improves the lives of greater society while also not instilling any undue harm? And one other thing that sticks out in the FDA commissioner's comments, it's a challenge for FDA, a challenge for the government is in the health space improved outcomes or benefit from AI, there are two ways that they have to look at this. One is the immediate outcome, right?
There's an immediate net positive outcome, but in the healthcare space that can look totally different over time, can actually cause harm over time. And that's it. If you take AI out of it, that's just health in general. There can be a therapy, there can be a device that creates tremendous benefit in the short term, but over the long term can produce harm. And that's the reason in the FDA concept, it's you have the approval, but you have monitoring, you have... Its constant monitoring to make sure that the approval that was initially made was the right decision, that things continue to go well over time. And so it's something that they're definitely going to have to do in the AI space as well that they're trying to work through.
Hans Rickhoff: Well, I think you guys both pointed to it, 2023 was the beginning or when the starting gun went off when it related to AI policy at the advent of ChatGPT. Here we are in January 2024 and I think through a large part of 2023, government wanted to work with industry and stakeholders to ensure they weren't stifling innovation. Fast-forward to where we are today, there's been dozens and dozens of congressional hearings across various committees. There's been a number of pieces of legislation introduced, and I think we saw even a little bit of this at CES where the focus really was on business and trying to continue to drive that innovation.
Some fracturing in terms of where the issue areas are going to be under debate moving into 2024, and this is an open-ended question for everyone on the call. When you talk about things like consumer protection or ensuring that the integrity of our elections is there, or creator rights and intellectual property and copyright, what are some of the big issues for 2024 now that we've got over the learning curve of “what is AI?”, “how is it going to be applied?”, “what is the government going to do?” post executive order framework.
And Reggie, maybe start with you, your boss, Leader Schumer, just finished his series of roundtables at the end of this past year and now we're moving into 2024. Where do you see things moving forward now that that has come to a close?
Reggie Babin: Good question. So it is that the leader and his partners in this effort have said all along that their goal was to essentially help to get the Senate up to speed and into a position where they could legislate, which doesn't necessarily mean get to a position where they can pass a massive expansive bill. It's more about getting a deeper understanding of what's going on in the industry, where the technological trends are heading, where are the areas where we are particularly most vulnerable, either as a society and citizens or as a country and a citizen of the world and to understand where our strengths are such that we can both accentuate those as well.
So I think the next steps will be to crystallize some of the information that has been received through the “Inside Forbes” series and the initial Senate 101 briefing series into clear policy positions and policy proposals, and then to go through traditional legislative process, which means working through committees with subject matter experts and the leaders on various topics of the various areas to figure out, one, where there is consensus on a number of issues, but then two, what are the issues that are most urgent such that they do either require legislation at the moment or that it would be advisable to pursue legislation.
At the moment, I think there's a lot of attention now for the foreseeable future on elections given that we are now at the part of election season after the Iowa caucuses and we'll see more and more generation of AI-infused ads over time. There will be more dissemination of the information that is produced by generative AI system. Then there's obviously a great deal of concern as far as what that means for the health of our elections. But part of that I think will be a public information campaign to get people better familiarized with how to consume that content. I don't know necessarily that we'll be able to legislate on that area, just because it is a topic that does tend to bring out some of the deeper divides in our politics. But things like frankly: competition in China, which I think is probably going to be the drinking game buzzword of this podcast and that is ever-present, right?
That's the dynamic that drives most bipartisan policymaking in Washington, and it's a dynamic that has been at the center of this conversation from the start. So I suspect we'll see some effort whether through NDAA, which obviously Ryan is very familiar with or stand-alone legislation to ensure that the federal government is bolstering U.S. capacity as it relates to China, both on the economic and national security side. And then beyond that, there's bipartisan agreement on the need to invest in infrastructure for training and safety research and to make sure that as many engineers as possible have access to the type of infrastructure that you need to develop AI systems.
And there's obviously a pilot program for the mayor and the EO, but there may be some effort to make that a more permanent system through legislation. I think in the short term we'll see in this route of appropriation that effort to provide commerce in this with the resources they need to carry out. There are expansive mandates under the president's executive order. So there's a lot going on. I think it'll be probably a little bit less comprehensive than some folks might want, but we will see this year as the beginning of the real effort over time to legislate in this space and to construct incrementally an AI regulatory regime.
Hans Rickhoff: Reggie brought up competition with China and Christian when you were walking the floor, we saw a lot of cool things like transparent TVs and other really neat technology out there, but you talked about some of the potential issues related to export controls. And looking at it through your international regulatory lens, what types of issues did you potentially see as you walked around CES for those global companies, especially ones that maybe want to do more business in the United States or maybe in particular businesses that are doing a lot of development in China or outside of the United States?
Christian Davis: No, absolutely. I mean, there are a few key issues that I think are really top of mind of the national security regulatory landscape and certainly relevant to the folks at CES and the technology at play. I think a lot of those center around technology transfers, a lot of those relate to access to data and then also capital flows back and forth between the U.S. and China. One of those areas is outbound investment restrictions, which is a new regime that comes out of an executive order that President Biden signed in August. That's focused on investments into Chinese companies in the AI semiconductor and quantum space. Those rules are coming out over the next year, and I think that's going to have a big impact on those industries, particularly as the Chinese companies in that space, but also the collaboration of between the U.S. and China and amongst multinational companies in those sectors. We're expecting proposed rules to come out early this year in the coming weeks, and I think that's something that everyone's watching really closely.
Another one focused on artificial intelligence is in the export control arena, which relate to one of the big ways that the administration is going after national security issues relating to China's going after the compute power and specifically the GPU chips that are largely made in the U.S. and using U.S. technology and heavily restricting the access of those chips to Chinese companies. I think that's something that has been really started about a little over year ago, was further refined in a rule, an export control rule that came out in October. And I think we'll see that further refined and further restrictions around the access to that compute power, which is so critical to development of artificial intelligence.
And the last one I'll mention is that there's these rules called the ICTS rules, the Information Communication Technology Services rules, which if you look back at the Trump Administration, it was the rules that the administration tried to use to ban TikTok and WeChat. And those rules have been challenged in court and I think are less a more circumscribed authority than they were initially considered by the Trump Administration. But under the Biden Administration, they really have been stepping up a regulatory process around those rules. And I think the commerce department, we've seen them really building up that team, and I think we're expecting more use of that authority, which can really be used in the technology space to prohibit certain transactions, to mitigate others that again, focuses around those same issues.
I said that was the last one, but I'll just do one more issue. I can't help myself, and I'd be remiss without talking about CFIUS , which is my primary area of practice. CFIUS continues to be very aggressive. The assistant secretary of treasury that is in charge of CFIUS was speaking at CES and talking about a lot of these concerns, particularly around Chinese investment in the U.S. technology sector. I mean, that is going to continue to be an issue of concern and really apply to a variety of other types of investment in the U.S. where there's concerns about investors with third party ties to Chinese companies, either through supply chains or invested relationships where there's possibilities for the U.S. government to have national security concerns about companies and their links to China and CFIUS has been very active in this space, imposing mitigation agreements, blocking other types of transactions, and I think we'll continue to see that in the year ahead.
Reggie Babin: Speaking of the year ahead, Ryan, we alluded to this, the one area where we did see meaningful movement in Congress on AI was in the National Defense Authorization Act. I'm curious if you have thoughts on whether you expect that to be an ongoing trend, whether you think that this is going to be an annual space for AI policymaking, and just generally how you're thinking about NDAA and AI as it relates to the Department of Defense.
Ryan Thompson: Yeah, thanks, Reggie, and short answer is yes. I mean, look, as everybody on the podcast knows, we did an update back in early December, December 7th, most everybody here was a co-author there giving our views on the AI and ML provisions that were in the NDAA. So look, I think as Hans said earlier, the starting gun going off this past year in 2023, I think, whereas you typically see in Washington a linear growth and topics and members talking about particular policy issues, I think it's become clear that the AI and ML are certainly not new to the Department of Defense, but I think on Capitol Hill, we're going to see exponential growth as this flywheel continues to pick up speed and the application, this technology into DOD and certainly various provisions of the NDA.
As you mentioned, it is a perennial bill that is passed every year and as soon as one NDA is concluded, the process to begin the next starts. So that's really the season we're in right now and expect that, yeah, we'll start getting requests into offices and having posture hearings February March, hearing from the various COCOMs and service branches about what they need. And I absolutely anticipate that AI is going to continue to be an area of considerable focus for the DOD. And yeah, see that only growing after only widely from here on out. Not sure what your question was, but that was your answer, Reggie.
Reggie Babin: Somehow you still stuck the landing, thank you.
Ryan Thompson: And I will say, actually, since we're joking for a second, the other space that I think is interesting for this tech that you're clearly seeing a huge dwell on is you have disruptive technologies. I mean, there's the application of AI and ML for some of the more mundane tasks, the Department of Defense show, logistics, enterprise asset management. The list is 1000 miles long, but you're really starting to see the Department of Defense focus on with their disruptive capability's office, with the replicator program that they set up, they're really seeking out smaller, more treatable platforms that are almost all fueled by AI to get to the war fighter, to best our odds for tomorrow's conflict. So it's an exciting space for certain.
Hans Rickhoff: Well, thanks, Reggie. Thanks, Christian. Thanks, Virgil. Thanks, Ryan. 2023 was an exciting year for AI federal policy. I think 2024 is going to be just as exciting, if not more so. Please check out our current update from January on AI as well as some of the other updates that we mentioned on this podcast, as well as our previous podcasts that we've done and our other updates. If you have any questions, feel free to reach out to anyone that was on this podcast.
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