Artificial Intelligence in Russia Issue 9, August 28, 2020

The Artificial Intelligence in Russia newsletter features a summary of recent Russian-language reports on the Russian AI and autonomy ecosystem, divided into the following sections:

• Governance and Legal Developments
• Military and Security Developments
• Corporate and Market Developments
• Education and Training Developments
• Article: AI for Munitions Storage
• Spotlight: AI in Russian Manned Aircraft - the Su-35S
• In Brief: Russian Government Agencies Announce Initiative Utilizing AI

The following preview shows the first item in this issue:

1. Funding cuts planned to AI federal project

The newspaper Kommersant reported on August 17 that the Ministry of Communications planned a significant reduction in funding to the AI federal project. In early 2020, the plan was to spend 125 billion rubles ($1,675 million), including 89,7 billion from the federal budget, through 2024, but now the plan is to spend 27,7 billion rubles ($371 million), of which 22,4 billion are from the federal budget. The cuts have to do with reductions in federal budget spending due to the COVID-19 pandemic. While government officials wouldn’t go on record to confirm the numbers of the budget, which are yet to be finalized, unnamed sources noted that this may not be a reduction in practice because efforts were likely to be financed from budgets of other federal efforts focused on digitization. Some cautioned that there could be further cuts to budgets focused on digitization due to the lingering impacts of the COVID-19 pandemic on the Russian economy. Others noted that the government’s interest in AI could be cyclical and, due to the pandemic, the focus could shift toward biotechnologies and related areas. Still others posited that, even in an environment of spending cuts, the government needed to focus on stimulating demand, investing in education efforts, and removing regulatory limits on employment of large user datasets. According to a KPMG Russia representative, government subsidies could slow down development efforts because they stimulate “not AI technologies, but technologies of receiving government subsidies.” Please see past issues of AI in Russia on discussions of the AI federal project, including its potential merger into the Digital Economy effort.

2. Officials shed light on experimental legal regime operations

At an online conference on the new digital legal sandboxes organized by the Kommersant newspaper on August 11, the deputy minister of economic development, Vladislav Fedulov, gave details of how the government will apply the experimental legal regime when it comes into force. The steps of the process as he formulated them are as follows:

• A legal entity or independent entrepreneur conceptualizes an experimental legal regime and sends documents justifying its feasibility, explaining how the regime will be useful for consumers.
• The Ministry of Economic Development then checks the plan for several factors, including the background of those in the company’s management to see whether they have ever been sued, the finances of the company to see whether it has any debts, and any other grounds included in the law.
• If the regime passes this check, the Ministry of Economic Development sends the plan to the sectoral ministry relevant to the subject matter of the proposed regime and to the “organization of the business community.”
• If the sectoral ministry does not raise any objections, the Ministry of Economic Development prepares a draft governmental decree on approval of the regime, which indicates its period of validity, its participants, and the date of its introduction. In addition, in the future, by decree of the sectoral ministry, other companies could also join this regime.
• Fedulov also stated that, in the case of experimental legal regimes in the areas of control and supervision, public services, and finance, the state will act as the initiator of the potential regimes and the central bank will review the proposals. The Ministry of Economic Development is in the process of preparing 17 by-laws on the implementation of the law, and plans to adopt them by the beginning of fall.