AI has already transformed industries and the way the world works. And its development has been so rapid that it can be hard to keep up. This means that those responsible for dealing with AI’s impact on issues such as safety, privacy and ethics must be equally speedy.

But regulating such a fast-moving and complex sector is extremely difficult.

At a summit in France in February 2025, world leaders struggled to agree on how to govern AI in a way that would be “safe, secure and trustworthy”. But regulation is something that directly affects everyday lives – from the confidentiality of medical records to the security of financial transactions.

One recent example which highlights the tension between technological advancement and individual privacy is the ongoing dispute between the UK government and Apple. (The government wants the tech giant to provide access to encrypted user data stored in its cloud service, but Apple says this would be a breach of customers’ privacy.)

It’s a delicate balance for all concerned. For businesses, particularly global ones, the challenge is about navigating a fragmented regulatory landscape while staying competitive. Governments need to ensure public safety while encouraging innovation and technological progress.

That progress could be a key part of economic growth. Research suggests that AI is igniting an economic revolution – improving the performance of entire sectors.

In healthcare for example, AI diagnostics have drastically reduced costs and saved lives. In finance, razor-sharp algorithms cut risks and help businesses to rake in profits.

Logistics firms have benefited from streamlined supply chains, with delivery times and expenses slashed. In manufacturing, AI-driven automation has cranked up efficiency and cut wasteful errors.

But as AI systems become ever more deeply embedded, the risks associated with their unchecked development increase.

Data used in recruitment algorithms for instance, can unintentionally discriminate against certain groups, perpetuating social inequality. Automated credit-scoring systems can exclude people unfairly (and remove accountability).

Issues like these can erode trust and bring ethical risks.

A well-designed regulatory framework must mitigate these risks while ensuring that AI remains a tool for economic growth. Over-regulation could slow development and discourage investment, but inadequate oversight may lead to misuse or exploitation.

This dilemma is being treated differently across the world. The EU for example, has introduced one of the most comprehensive regulatory frameworks, prioritising transparency and accountability, especially in areas such as healthcare and employment.