Regulating the Most Disruptive Technology – Understanding Why AI Should Be Sandboxed

Abstract

Our century has witnessed the emergence and unfolding of disruptive technologies. Regulating these fields poses substantial challenges for law-making entities. The rapid pace of technological evolution does not allow for the application of classical regulatory methods since, by the time a norm is established, the technology often surpasses the provisions. Recently, so-called dynamic regulation methodology has gained wider acceptance. This puts the legislator in a more cooperative role working alongside actors from the innovation ecosystem and, instead of being a rigid ‘ruler’, involves tailoring the legal regime together with the former. Regulatory test environments, also known as sandboxes, are key tools in this modern approach. They have already proven their usefulness in the promotion of innovation and regulation procedures in the fintech sector. I believe that sandboxes are excellent laboratories for forming the legal regime for artificial intelligence, which may be the most disruptive technology of our time. In the present contribution, I will examine why it is hard to regulate disruptive technologies and describe the situation to be resolved in the innovation world that underlines the necessity of using sandboxes. I also depict their operating principles to enlighten readers about their vital role in the age of AI.