Navigating the Varied Faces of AI Capitalism: Unraveling Regulatory Complexities in Law and Political Economy

The convergence of Artificial Intelligence Technologies (AITs) has prompted comparisons to a contemporary industrial revolution, weaving narratives of both disruptive transformation and capitalist continuity. In the swift march of technology, the widespread adoption of online platform-based AI services, exemplified by ChatGPT, has not only revolutionized business transactions but has also presented a profound challenge to conventional regulatory frameworks. This transformative shift introduces disruptions in the fields of law and political economy, fundamentally challenging the foundations of legal and regulatory processes. Acknowledging the emerging risks and challenges in the regulatory landscape posed by platform businesses, this study addresses a pivotal research question: How do AI services impact regulatory dynamics and decisions? The investigation delves into the intricacies of why and how governments formulate distinct regulatory responses to disruptive technologies. AI services connect producers and consumers without the need for physical production and sales facilities, creating a phantomization of business transactions (Hanna, N., 2018). They enter the market unregulated, operating in legal gray areas. This challenges the legal foundation of 'property' and regulatory fundamentals, including the roles and responsibilities of stakeholders and the government's impacts within the market system. In this context, the concept of regulatory law and governance undergoes disruption as such businesses challenge the traditional notion of property in the existing legal system. Operating within multiple legal contexts and exploiting legal ambiguities, these businesses advocate for a shift from a property-based to a governance-based approach in technology law discourse (Margoni, T., Ducuing, C., & Schirru, L., 2023). In the domain of regulatory processes, a foundational discourse revolves around the pivotal role of governments in formulating regulations, underpinned by their authority derived from expertise and sector interactions, facilitating the establishment of market rules (Pierson, P., 1993). However, technological advancements challenge regulatory norms, prompting reevaluation. Regulatory effectiveness lags behind technological pace, exemplified by AI services and platform businesses operating within legal uncertainties. Consequently, governments conduct ex post evaluations (Frenken, K. & Pelzer, P., 2020), highlighting technology’s challenge to regulatory authority. Moreover, the transnational nature of AI services, when considered within individual countries with diverse regulatory stances and values, adds a new layer of complexity to regulating AI-driven services and platforms (Leiser, 2019). As AI services can be presented real-time throughout the world, traditional regulatory frameworks struggle with enforcement and even consensus due to the global reach of information generators operating beyond a single nation’s legal confines. This study aims to unravel the intricate tapestry of AI business capitalism, shedding light on the disruptions in regulatory dynamics and political economy. Employing an interdisciplinary approach that integrates political science, policy administration, and law, the study analyzes regulatory frameworks and decisions in the EU and Korea with cases of regulatory processes on AI services, such as AI Act and Data Governance Act. The insights garnered will contribute to a comprehensive understanding of the varied development of AI technologies, addressing critical interdisciplinary knowledge gaps and offering valuable perspectives for the regulation of emerging technologies and platform-based AI business models on a global scale.