One could argue that, thanks to Alan Turing, the UK is the birthplace of AI. 

We’re also doing pretty well in that respect, being currently ranked fourth in the world on Tortoise’s Global AI Index, behind the US, China and Singapore. 

Around one third of Europe’s AI-based companies reside within the UK, and the conjecture is that our more permissive AI Rulebook could encourage further growth on our home turf as the EU AI Act starts to really bite.

There are certainly some pros and cons to consider for UK businesses.

The Brussels effect

A simplified view of the state of play is that the UK is being proactive in innovation and commerce, and the EU is majoring on regulation. The EU AI Act is the first truly comprehensive regulatory scheme for AI, aiming to regulate it based on risk levels, with stringent requirements for high-risk AI systems. The UK’s approach, on the other hand, favours sector-specific regulation, leveraging their existing governing bodies and frameworks to address the risks and impacts of AI within their sectors. 

However, the world isn’t that simple and the EU and UK don’t act in a vacuum. It all sounds fine if we’re thinking parochially, but there’s two key factors that will affect the future of AI in the UK, the first of which is what’s known as the ‘Brussels Effect’. 

As the EU has such economic power and global reach, the EU AI Act will likely set a de-facto global standard for regulations worldwide, as we saw with the GDPR. This will likely be coming sooner, rather than later, for high-risk AI systems embedded in products and services worldwide. The second factor is that the EU AI act has an “extraterritorial” reach, meaning any UK businesses operating or selling in the EU market will need to comply with the act, regardless of the UK’s stance on AI. 

This means that the UK could still remain a great test bed for research and development of AI systems, and in the period before the EU AI Act goes global in various forms, it will still likely be easier to launch services outside of the EU. Although this will likely all eventually coalesce, it means we will retain some of our advantage for the next couple of years as tech in the EU adapts to the Act. 

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The need for balance

In reality, a reasonable way forward would be to fuse both approaches. The UK should leverage its ability to be ‘first past the post’ when it comes to AI innovation, but also provide the groundwork for government and private entities to collaborate with the EU – and other countries – to ensure all innovation is sound when it comes to ethical and regulatory requirements.


It’s also likely that the EU AI Act will face significant implementation pains, necessitating further revisions – Generative AI was one it had to turn on a dime for – and will generally take some time to ‘settle in’ when it comes to real-world implementation.

An opportunity on the horizon?

In conclusion, in the magical year or two we will have before the EU AI Act goes global, we could attract significant Big Tech investment from both the EU and worldwide. In this period we’ll likely see innovative startups take off in the domestic market, which in turn will likely fuel interest in academia in the UK. So British organisations should make hay while the sun shines by reaping the potential benefits of being early adopters of new AI technologies without the pain of substantial EU-forged regulation.

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