Datacenter groups call for changes to Brazil's AI framework bill

The final draft of a Brazilian senate bill regulating the use and development of artificial intelligence is vexing the datacenter industry, which is hoping for amendments to the text in congress.

A joint letter co-signed by Scala Data Centers, Odata and Elea Data Centers expresses “concern regarding the potential impact of PL 2338/2023 on the country’s economic and technological future, particularly regarding the development and training of artificial intelligence (AI) and machine learning (ML) models.”

The industry concern focuses on rules seen as excessively restrictive for training language models based on copyrighted content. In the sector's view, the bill will make investments in large processing centers for training these models unfeasible.

“We all agree that copyright should be protected and remunerated in Brazil. This is a very important point to emphasize. However, the question is how you do this,” Elea CEO Alessandro Lombardi told BNamericas.

Article 62 of bill 2338/2023 guarantees the protection of any copyrighted content. Because of this, the arts and culture industry has publicly expressed support for the bill.

The datacenter sector believes the bill makes it difficult to identify which content that is publicly available on the internet would be copyrighted. It calls for the issue of copyright to be addressed in a separate bill.

“Given the complexity of the debate on copyright and its relationship with the development of AI, we ask that this issue be addressed more appropriately in specific legislation, with more time dedicated to a qualified discussion between all interested parties,” the three datacenter majors wrote.

Other datacenter companies, while not signing the letter, appeared to support the three companies. Equinix has been working on the issue through industry associations ABDC and Brasscom, BNamericas was told.

“Chile and Colombia are trying to get ahead of Brazil in the way they're structuring their incentives for datacenters and AI, and other countries in other regions such as Southeast Asia, are positioning themselves as well,” Equinix Brazil CEO Victor Arnaud told BNamericas.

For the three companies that signed the document, if a separate copyright bill is not possible, an alternative would be to change the wording of the AI bill to state that the use of works “publicly available on the internet for the development and training of AI systems in a non-onerous manner should be the general rule so as not to exclude Brazil from the international scenario of AI development.”

They add that Brazilian legislation would go beyond the European AI Act by establishing payment for all third-party content. EU law only provides for the right to delete proprietary data.

“In addition, the obligation to identify all protected works in the training phase of a model is currently technically impossible for enforcement by those who develop AI – that is, the customer of datacenters,” the letter said.

In the letter, the companies say that without “regulatory obstacles” the Brazilian datacenter market would expand by a factor of 10 to 15 witin 10 years, attracting another 750bn reais (US$150bn) in investments.

The companies also praised the public policies that encourage datacenter investments in Brazil and the BNDES credit line for the sector.

The full letter can be downloaded in the Documents box in the top right corner.