Well intended regulation is almost always a bad deal which protects the establishment and increases inequality

From The Unintended Consequences of Censoring Digital Technology – Evidence from Italy’s ChatGPT Ban by David Kreitmeir and Paul A. Raschky.   From the Abstract.

We analyse the effects of the ban of ChatGPT, a generative pre-trained transformer chatbot, on individual productivity. We first compile data on the hourly coding output of over 8,000 professional GitHub users in Italy and other European countries to analyse the impact of the ban on individual productivity. Combining the high-frequency data with the sudden announcement of the ban in a difference-in-differences framework, we find that the output of Italian developers decreased by around 50% in the first two business days after the ban and recovered after that. Applying a synthetic control approach to daily Google search and Tor usage data shows that the ban led to a significant increase in the use of censorship bypassing tools. Our findings show that users swiftly implement strategies to bypass Internet restrictions but this adaptation activity creates short-term disruptions and hampers productivity.

Authoritarian/totalitarian systems always want to regulate that which is new or not understood.  It is always under the banner of protecting people, though usually it is about protecting the controlling regime.  Sometimes the nominal danger is insufficiently obvious and there has to be some sort of propaganda program in place to gin up fear of change and novelty in order to get the necessary support for regulation.

Regulation usually ends up being ineffective at achieving its stated end, costs more than was planned, creates mechanisms which encourage corruption, and imposes greater consequences than were anticipated.  

There is a class dimension as well which is known but not frequently discussed which I will come to in a minute.

ChatGPT and its ilk are novel and possibly represent significant disruption (change.)  Views have ranged from "It's a small step forward but mostly much ado about nothing" through "It is the end of civilization as we know it" up to "This is the beginning of an extinction level event."  

The US has generally taken a more relaxed hands off approach despite the evidence free panicky public intellectuals and their nattering.

Europe, in contrast, has been much more inclined to prophylactically protect its citizens from the possible but unknown threats posed by ChatGPT.  Italy was one of the first out of the blocks with a ban on its use.

With the free speech implications and the absence of any obvious danger, this sort of regulatory fear seems strange to American eyes and ears.  But, different people, different ways.

This research paper inadvertently highlights one of the under-discussed issues of regulations.  It is reasonably well-established that regulation often (always?) functions as a mechanism for protecting existing players from new players in an arena.  Regulations raise costs and slow innovation, two aspects which favor the well-established and the well-funded and disadvantage outsiders and innovators.

This research sort of hints at that.  The ban goes into place.  Insiders only require a couple of days to figure out ways around the ban.  They suffer a couple of days of lost productivity plus whatever might be the costs of the work-around.

Inadvertently though (though perhaps advertently) Italian regulators have locked in the existing Italian class of ChatGPT users as a protected class.  The regulation applies to them.  Since this still very early days in the AI ChatGPT saga, these early regulations are a mere bump in the road.  

A new Italian entrant into the game a few months from now will have navigate not only the regulations but also address the establishment advantages of those who were there at the very beginning and who are now essentially protected by the regulations and who can likely wield the regulations against new entrants.

From a class perspective, the regulations protect an established class against new entrants, raise costs, and slow innovation.  It does not stop the ChatGPT revolution at all.  If there are real risks arising from ChatGPT, the regulations do not provide any protection despite the best intents.  All the Italians have gained is a more sclerotic market structure which costs more and which adapts more slowly if at all.

Seems a poor bargain.