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TOKYO, July 3 (Reuters) – Japan is leaning toward softer rules governing the use of artificial intelligence (AI) than the European Union, said an official close to deliberations, as it looks to the technology to boost economic growth and make it a leader in advanced chips.

The aim by year end is to work out an approach for AI that will likely be closer to the U.S. attitude than the stringent rules championed by the EU, said the official, who declined to be identified as they were not authorised to talk with media.

A softer Japanese approach could dull EU efforts to establish its rules as a global benchmark, with requirements such as companies disclosing copyrighted material used to train AI systems that generate content like text and graphics.

EU industry chief Thierry Breton is visiting Tokyo this week to promote the bloc’s approach to AI rule-making as well as to deepen cooperation in semiconductors.

The government official did not elaborate on areas where Japan’s rules were likely to differ from those of the EU.

The chair of the government’s AI strategy council, The University of Tokyo’s Prof. Yutaka Matsuo, called the EU’s rules a “little too strict,” saying it is “almost impossible” to specify copyrighted material used for deep learning.

“With the EU, the issue is less about how to promote innovation and more about making already large companies take responsibility,” said Matsuo, who also chairs the Japan Deep Learning Association and is an independent director on the board of Masayoshi Son’s SoftBank Group (9984.T).

Advances in generative AI by firms such as startup OpenAI, backed by Microsoft (MSFT.O), are stimulating both excitement and concern due to the potential to transform business and society in general.

Such is its potential that AI is among technologies including advanced semiconductors and quantum computers that the U.S. and allied industrial democracies are in a race with China to develop.

“There are things that really are a concern and I think these things probably should be a concern for any democracy,” Breton said.

“With likeminded partners and friends like Japan or the U.S., I think it’s important to explain what we did,” Breton said of the EU’s regulatory approach.

For Japan, AI could help cope with the population decline that is causing a labour shortage.

It could also stimulate demand for advanced chips that government-backed venture Rapidus plans to manufacture as part of an industrial policy aimed at regaining Japan’s lost lead in technology, the source said.

Japan’s computing power, defined as the availability of graphics processing units (GPUs) used to train AI, is far behind that of the U.S., experts said.

“If you increased the GPUs in Japan by 10 times, it would probably still be less than what OpenAI has available,” said Prof. Matsuo.

Reporting by Sam Nussey and Tim Kelly; Editing by Christopher Cushing

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