Operationalising AI regulatory sandboxes under the EU AI Act: The triple challenge of capacity, coordination and attractiveness to providers

Abstract

Against the backdrop of the European Union (EU)’s objective that artificial intelligence (AI) regulatory sandboxes under the EU AI Act should both foster innovation and assist with compliance, considerable challenges are identified for Member States around capacity-building and the design and operationalisation of regulatory sandboxes. The article charts Member States’ early-stage preparations for implementing AI regulatory sandboxes and contends that there is a risk that differing approaches being taken by individual national sandboxes could lead to fragmentation and jeopardise a uniform interpretation of the AI Act in practice. This could also motivate innovators to play sandbox arbitrage. With sandbox participation being voluntary, the possibility that AI regulatory sandboxes may prove unattractive to innovators on their compliance journey is also explored. Confidentiality concerns, the inability to relax legal rules during the sandbox and the inability of AI regulatory sandboxes to deliver a presumption of conformity with the AI Act are identified as pertinent concerns for innovators contemplating applying to AI regulatory sandboxes as compared with other direct pre-market compliance routes provided to them in the form of application of harmonised standards and conformity assessment procedures.