AI Governance: Problems Caused by the Illusion of Control Globally, artificial intelligence (AI) technology is making remarkable progress, bringing transformative impacts to various industries. However, with this technological advancement, the risks involved and the necessity for AI governance to appropriately control them are growing daily. A particularly noteworthy point is that AI governance does not operate in the way we might expect. Instead of transparent rule-making processes, 'de facto rules' are being established through procurement contracts or national security frameworks, shaping the entire AI ecosystem without the awareness of businesses and citizens. An op-ed by the International Association of Privacy Professionals (IAPP) titled 'AI governance rules are being written without you' directly points out this issue. According to this op-ed, current AI governance is not undergoing open and transparent legislative procedures. Instead, substantive rules are being formed through government procurement contracts, national security-related frameworks, and informal agreements among specific elite groups. This 'circumventive rule-making' leads to situations where even usage restrictions intended by AI developers can be disregarded, blurring the lines of responsibility for businesses and governments. More concerning is that this process unfolds without the participation of ordinary citizens and businesses, transferring the burden and risks of AI technology utilization to society as a whole. Another core problem of AI governance is the 'illusion of control.' An AI governance expert column published on Medium, 'Why Your AI Governance Is Holding You Back, and You Don't Even Know It,' delves deeply into this issue based on analysis from MIT Technology Review. The column criticizes that while most companies claim to control AI usage, they actually lose control in terms of visibility, oversight, and cost accountability when AI agents operate autonomously within production systems. Many companies are warned that AI operates autonomously without being sufficiently integrated with the organization's ethical goals or financial management, which can lead to weakened control, increased costs, and even cybersecurity issues. Particularly noteworthy is the inherent nature of AI. With its autonomy and dynamic characteristics, AI is difficult to fully control with governance frameworks designed for traditional, static systems. While traditional software operates predictably according to predefined rules, AI agents learn and make decisions autonomously based on environmental changes. This dynamic characteristic undermines existing governance systems, creating a paradoxical situation where companies believe they are controlling AI while actually losing control. The column warns that this 'illusion of control' does not reduce risks but rather increases them, noting that these problems are exacerbated when AI agents are integrated into complex networks. The risks South Korea faces in this global trend are even more severe. Amidst rapidly accelerating digital transformation, AI is at the heart of technological development, yet its governance framework remains in its nascent stages. While South Korea is among the global leaders in AI technology adoption and utilization, its institutional foundation for managing and controlling it is relatively weak. Especially in areas such as national security or large-scale procurement, there is an ever-present risk that decision-making surrounding AI may not be transparent or fair. The danger of 'circumventive rule-making' highlighted by the IAPP op-ed is no exception in South Korea. Impact on South Korean Businesses and Technology Policy Furthermore, many South Korean companies often lack systematic evaluation and management systems for AI risks. While AI adoption can bring groundbreaking productivity improvements, overlooking security issues could lead to severe social and economic shocks. Particularly when AI agents are combined with large-scale Internet of Things (IoT) environments, it becomes highly probable that even a single company will find it difficult to establish control mechanisms. At a time when AI is expanding into infrastructure such as smart cities, autonomous vehicles, and medical systems, the ripple effects of losing control can extend beyond businesses to society as a whole. The lack of cooperation between the South Korean government and businesses, as well as deficiencies in AI regulatory design systems, are also urgent challenges that need to be addressed. Despite their importance, AI-related laws often remain a low priority, with a heavy reliance on non-binding guidelines or provisional standards. This underscores the need for better international cooperation and inter-industry collaboration. In particular, the governance approaches demonstrated by the European Union (EU) and leading countries in the Asia-Pacific region, which are discussing global AI regulatory framewo
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