Artificial intelligence is advancing at a pace that regulators are struggling to match, leaving businesses that build, deploy and use AI to navigate an increasingly fragmented and uncertain rulebook.

A new whitepaper from LexisNexis Regulatory Compliance, titled ‘Navigating the challenges of AI regulation’, maps how jurisdictions across the world are responding, and warns that the gap between innovation and oversight is creating real exposure for firms.

According to the report, regulators face three persistent obstacles. There is still no agreed definition of what counts as AI for regulatory purposes, many systems operate as opaque “black boxes” that are difficult to audit or hold to account, and AI routinely crosses borders, complicating questions of jurisdiction. Policymakers must also strike a careful balance, as heavy-handed rules risk stifling innovation while light-touch regimes could allow harm to spread unchecked.

The result is a patchwork of approaches. The EU has opted for its prescriptive AI Act, the UK continues to favour a principles-based model led by existing regulators, and the US relies on a collection of state laws in the absence of a single federal statute. Meanwhile, several countries are retreating from previously planned mandatory frameworks.

In the UK, the government has avoided a standalone AI law, instead empowering regulators to apply five high-level principles: safety, security and robustness; appropriate transparency and explainability; fairness; accountability and governance; and contestability and redress. Existing legislation is already doing much of the heavy lifting. The Online Safety Act 2023, while not designed specifically for AI, directly affects recommender systems, content moderation tools, search algorithms and generative AI.

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