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Microsoft (NASDAQ:MSFT) President Brad Smith is calling for urgent global rules around artificial intelligence, arguing that AI systems currently face fewer safety requirements than everyday consumer products such as milk or washing machines.
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Speaking to the BBC, Smith said governments should establish a common set of AI safety standards, including independent evaluation of new systems, mandatory incident reporting and an emergency brake that could be used when AI agents behave dangerously.
Right now, your washing machine is subject to more safety rules than AI. Every carton of milk that you see in the grocery store is subject to safety rules and inspection, Smith said.
Smith also argued that people or organizations affected by a rogue AI system should be notified when a breach occurs.
He said AI companies should face legal requirements to document serious incidents, similar to reporting frameworks already used in other regulated industries.
We know how to do this for other products, Smith said. We should build on that knowledge and think about how to apply it to AI.
The comments put Microsoft's president at odds with President Donald Trump's preference for a lighter regulatory approach. Trump has argued that excessive rules could slow U.S. AI development and weaken American companies relative to Chinese competitors.
Smith, however, characterized AI as both a tool and a weapon, reinforcing his view that voluntary industry safeguards alone may not be enough.
His comments also come as major AI developers including OpenAI, Anthropic and Google DeepMind continue debating how much oversight should accompany increasingly capable models.
I think the significance for Microsoft investors is that Smith is effectively arguing for more regulatory structure around an industry Microsoft is heavily invested in.
That sounds counterintuitive, but large incumbents can sometimes benefit from clearer rules because they have the capital, legal infrastructure and compliance teams required to meet them.
Smaller AI startups may have a harder time absorbing those costs.
The risk is that stricter global rules could also slow model deployment, raise development expenses and limit certain AI applications.
For investors, the key issues to watch are mandatory safety testing, incident-reporting rules, liability standards and whether major markets converge on common AI regulations or adopt conflicting frameworks.
If global rules become more standardized, Microsoft may gain clarity around deployment. If regulation fragments across countries, compliance could become much more expensive.
