Panic Over Generative AI Is Nearing the “Height of Hysteria”; New Report Urges Policymakers Not to Overreact

WASHINGTON—Public panics over technological developments are nothing new, but the current panic over generative artificial intelligence (AI) is in its most volatile stage, climbing toward the “height of hysteria,” according to a new report from the Center for Data Innovation.

The report maps the historical pattern of technology panics—from the advent of the printing press to present day—and calls on policymakers to recognize that fears about generative AI are part of a predictable cycle and hold off regulating generative AI.

“Exaggerated and misleading concerns about generative AI’s potential to cause harm have crowded out reasonable discussion about the technology, generating a familiar, yet unfortunate, ‘tech panic,’” said Daniel Castro, director of the Center for Data Innovation who co-authored the report.

The report enumerates four stages of the tech panic cycle, a recurring historical pattern of public reactions to new technologies.

Table 1: Four States of the “Tech Panic Cycle”

Stage	What Occurs
1. Trusting Beginnings	Knowledge of the new creative tool is limited to those who invented it, innovators in the field, commentators, and domain experts. Doomsayers soon catch wind of the new tool and raise the alarm.
2. Rising Panic	Fears spread quickly among alarmist networks and those who have the ear of policymakers. Policymakers susceptible to hot-button issues legitimize the fears by repeating them in legislative drafts, hearings, and public speeches and statements. The media ecosystem becomes saturated with overblown fears, and only the most outrageous claims remain. Reaches the apex at the end of this stage: the Height of Hysteria.
3. Deflating Fears	The public embraces the new tool and accepts its merit. By this stage, it is clear that many fears will never materialize. Disturbed by the growing popularity of new technology alarmists continue to incite panic but fail to gain traction as before. Micropanics occur, but the public is now less easily fooled. The Point of Practicality marks the end of this stage in which society integrates the new tech, and people no longer believe the doomsayers.
4. Moving On	Previous fears are exposed and ridiculed. Once feared tools are normalized, cooler heads lead policy conversations. Alarmists turn their attention to the latest shiny tech hype. New panics crowd out the old, and the cycle repeats.

The Center concludes that reactions to generative AI have progressed toward the height of the “Rising Panic” stage. As the new technology has grown in popularity and availability so too have alarmist reactions, with news media piling on sensationalist pieces. The Center’s report points out misleading claims about generative AI that major outlets have parroted as well as how these claims have spread and caused confusion among policymakers.

“Misinformation about these tools has spread like wildfire, fueling speculation about their potential and drawing attention away from the real risks—like new cybersecurity threats, including deepfakes, and new intellectual property concerns,” said Patrick Grady, a policy analyst who co-authored the report.

Figure 1: The Tech Panic Cycle

The report explores three case studies of tech panics from the past:

· the printing press and advances in paper technology, which created a tech panic around printed books;

· the phonograph and the means to store sound portably such as the record, which created a tech panic over audio recordings; and

· innovations in photography and film materials, which created the tech panic over motion pictures.

According to the report, four elements influence all tech panics: elitism, legacy industries, anti-tech crusaders, and news media. The Center breaks down how each of the four elements can be found in the tech panics for printed books, recorded sound, and motion pictures.  

The report emphasizes that today’s generative AI panic is only the latest in a long series of such tech panics, including many in the creative sector. The Center urges policymakers to consider three lessons from the past:

1. Recognize when a tech panic is taking place and use caution when digesting hypothetical or exaggerated concerns about generative AI that crowd out discussions of more immediate and valid ones.

2. Sensationalist claims about generative AI are anything but new.

3. Avoid overreacting to nascent fears when formulating policy to avoid unduly harming generative AI with misguided laws and regulations. Hit pause on any new legislation or regulations directly targeting generative AI until reaching the final stage of the tech panic cycle.

“Policymakers should remember the long history of tech panics, recognize where generative AI is in the current panic cycle, and remain calm,” said Castro. “Don’t succumb to the rush to regulate AI before anyone else does because that likely will bode ill, and lead to missed opportunities, for society.”

Read the report.