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How do governments regulate AI compared with other industries?

AI rules are mostly a risk-based layer added on top of existing industry rules, not one single licensing system.

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Covers: This page compares the main approaches governments use to regulate AI — such as voluntary frameworks, risk-based rules, and sector-specific guidance — with established regulatory models in industries like pharmaceuticals, finance, aviation, and food safety. It covers the structure and enforcement of these regimes, not predictions about specific future laws or advice on compliance.

Also answers: How is AI regulated compared to other industries? · AI regulation vs other industries · Are governments regulating AI like they regulate drugs and finance? · Comparing AI regulation with traditional industry regulation

The short answer

Interpretation AI-prepared starting map

AI regulation is being built mostly as a horizontal, risk-based overlay on top of existing sector rules, rather than as a single licensing regime like those for pharmaceuticals or aviation. The EU adopted a common legal framework for AI with the AI Act in 2024, and since 2016 numerous AI ethics guidelines have been published by bodies including the IEEE…12

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At a glance

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The evidence behind it

7 sources
  • Other studies and data4
  • Background3

Published in 2026

Sources on this page by kind and year
SourceKindYear
Algorithmic governance at work: a legal-sociological and policy analysis of AI regulation, institutional power and labor rights.Other studies and data2026
AI is less regulated than milk, says Microsoft presidentBackground2026
High-risk without safeguards? The EU AI Act and the push for deregulation of medical AI.Other studies and data2026
Governing AI for Mental Health: Fragmented State Approaches and the Case for a Federal Framework.Other studies and data2026
When hospitals build their own AI: a comparison of the EU and US regulatory framework.Other studies and data2026
Regulation of artificial intelligence (Wikipedia)BackgroundUnknown
Regulation of artificial intelligence in the United States (Wikipedia)BackgroundUnknown

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In brief

  1. AI regulation is mostly a horizontal, risk-based layer added on top of existing sector rules, not a single licensing regime like those for medicines or aviation.13

    Interpretation
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  2. The EU adopted a common legal framework for AI with the AI Act in 2024, while international AI ethics guidelines from bodies such as the IEEE and OECD carry no direct enforcement power.1

    Evidence-backed
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  3. US AI regulation is split between shifting federal executive orders and a growing set of state laws, with the December 2025 order directing agencies to challenge conflicting state laws and condition some funding on compliance.2

    Evidence-backed
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  4. In medical AI, proposed EU reforms would keep the high-risk label but strip most AI Act obligations, decoupling risk classification from the safeguards that give it meaning.3

    Evidence-backed
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  5. The EU treats hospitals developing AI as regulated innovators with defined obligations, while the US lets such innovation emerge as a by-product of general software regulation.4

    Evidence-backed
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What it means for you

Which fits you?

Pick the situation closest to yours. Each answer says what it rests on.

If you want to know what AI rules actually require of a developer or deployer

look at the sector rules that already apply to the product — for medical AI, the sources describe product-focused medical device law as the centre of gravity, with AI Act obligations potentially removed for high-risk devices.3

Evidence-backed

If you are deploying AI in a workplace

the frameworks described emphasise transparency, non-discrimination and human oversight in AI-powered workplace decisions, alongside data privacy and civil liability questions affecting employee rights.5

Evidence-backed

If you operate in the United States across several states

expect uneven protections and regulatory uncertainty, because states have taken different approaches — some regulating clinical use, some the technology itself — and federal policy has shifted between administrations.62

Evidence-backed

If you are a hospital building your own AI tools

the EU path treats you as a regulated innovator with defined institutional obligations, while the US path is more permissive and less institutionally differentiated.4

Evidence-backed

If you are looking for international rules with enforcement power

the sources describe international bodies such as the IEEE and OECD as lacking direct enforcement power, so binding rules sit at EU, national or state level.1

Evidence-backed

If you are assessing claims that AI is barely regulated

treat such statements as advocacy positions rather than measurements; the comparison to milk comes from a company executive calling for global AI rules, and no compliance-cost or enforcement data appears in these sources.7

Interpretation

The full explanation

Interpretation AI-prepared starting map

AI regulation is being built mostly as a horizontal, risk-based overlay on top of existing sector rules, rather than as a single licensing regime like those for pharmaceuticals or aviation. The EU adopted a common legal framework for AI with the AI Act in 2024, and since 2016 numerous AI ethics guidelines have been published by bodies including the IEEE and OECD, which lack direct enforcement power. In the United States, regulation is split between federal executive orders and agency-level sector rules and a growing set of state laws, with federal policy shifting direction between administrations. The recurring design questions are who is accountable, what is governed, when in the development lifecycle governance applies, and how it is implemented.12

What this rests on7 independent sources
  • Evidence 16
  • Interpretation 4

The full story · 2 chapters

01

How AI is currently regulated

AI summary:AI rules are emerging worldwide as ethics guidelines, the EU AI Act, and shifting US federal and state measures.

Evidence-backed

Evidence-backed: AI regulation is described as the development of public sector policies and laws for promoting and regulating AI, and it is an emerging issue in jurisdictions worldwide, including for international organisations without direct enforcement power such as the IEEE and the OECD. Since 2016, numerous AI ethics guidelines have been published in order to maintain social control over the technology, and organisations deploying AI are expected to adhere to established principles and take accountability for mitigating risks. The EU adopted a common legal framework for AI with the AI Act in 2024. AI governance is defined in a 2025 systematic literature review as covering who is accountable for AI systems, what elements are governed, when governance occurs within the development lifecycle, and how it is implemented through frameworks, tools or models.1

Evidence-backed

Evidence-backed: Across Europe, the Americas and the Asia-Pacific, AI regulation is increasingly organised around six dimensions: protection of human rights and data privacy in the workplace; governance frameworks addressing reskilling, job transformation and adaptation to AI-driven work models; risk-based oversight of AI systems; AI civil liability regimes affecting employee rights and HR practices; promotion of ethical AI to foster trust and mitigate bias; and strengthened monitoring, accountability and non-discrimination mechanisms. Legal frameworks emphasise transparency, non-discrimination and the need for human oversight in AI-powered workplace decisions.5

Evidence-backed

Evidence-backed: In the United States, the federal government and state governments have developed some regulation of AI through executive orders, federal laws and state laws, and federal agencies have developed some sector-specific regulations related to AI. The Biden administration's October 2023 Executive Order 14110 set directives on AI development and deployment; President Trump revoked it in January 2025 and issued Executive Order 14179. In December 2025, Executive Order 14365 directed federal agencies to develop a unified national approach to AI policy, evaluate state AI laws for potential conflicts, challenge them through legal action, and condition certain federal funding on state compliance, while exempting state laws on child safety, data centre infrastructure and state government procurement. Congress passed the TAKE IT DOWN Act in 2025 targeting AI-generated deepfakes, and several states have enacted AI-related laws, some already in effect, including in California.2

Evidence-backed

Evidence-backed: A four-state case analysis of statutory text in Illinois, Utah, New York and Nevada identified two governance approaches to AI in mental health: one regulating the use of AI in clinical contexts, and one regulating the technology itself. Some states combine elements of both. The approaches differ in where they locate risk in the use of AI for mental health support, and their limitations include uneven protections for consumers and regulatory uncertainty for developers, vendors, deployers and clinicians. Because AI in mental health operates across both clinical and consumer domains, the analysis argues neither approach alone can address the associated risks, and calls for a coordinated, risk-based federal regulatory floor.6

02

How this compares with medicines, devices and other regulated industries

AI summary:Unlike medicines and devices, AI rules layer oversight obligations over sector rules, with uneven enforcement.

Evidence-backed

Evidence-backed: The clearest structural contrast in the material is with product-focused regimes. Under the EU simplification agenda, proposed reforms to the Health Innovation Package would retain the high-risk classification of AI-enabled medical devices while removing most associated AI Act obligations. That decouples risk classification from the safeguards that give it regulatory meaning, including requirements on data governance, risk management, human oversight and postmarket monitoring. Rather than resolving regulatory overlap, the amendments shift the centre of gravity back to product-focused medical device law without ensuring equivalent AI-specific safeguards, which the authors argue may narrow attention to fundamental rights, weaken oversight in clinical use and increase legal uncertainty about accountability and responsibility.3

Evidence-backed

Evidence-backed: A second contrast concerns who is regulated. Hospitals are shifting from passive purchasers of AI systems to active developers of in-hospital machine learning tools tailored to local clinical needs. Comparing how the EU and the USA regulate in-hospital-developed AI-based medical devices across responsiveness to clinical need, distribution of innovative capacity, and pathways for scaling and diffusion, the EU adopts a structured model that treats hospitals as regulated innovators operating under defined institutional obligations, whereas the USA relies on a more permissive and less institutionally differentiated framework in which hospital innovation emerges as a by-product of general software regulation.4

Evidence-backed

Evidence-backed: A widely reported framing of the gap comes from industry rather than research: Microsoft's president described AI as less regulated than milk and called for global rules on AI, saying the UK is in the best position to lead the charge. This is a claim by a company executive about relative regulatory burden, not a measurement of it.7

Interpretation

Interpretation: Read together, the sources suggest the distinctive feature of AI regulation is not that it is absent but that it is layered: horizontal principles and risk categories sit above sector rules written for other products, and the two layers can pull in different directions. Where medicines and medical devices are governed through pre-market approval tied to a specific product, AI governance as described here is organised around accountability, oversight and monitoring obligations that apply across many products and workplaces, with enforcement power varying sharply between international guidelines and national or state law.134

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What to remember

The few things worth keeping from this page.

  1. AI regulation is mostly a horizontal, risk-based layer added on top of existing sector rules, not a single licensing regime like those for medicines or aviation.

  2. The EU adopted a common legal framework for AI with the AI Act in 2024, while international AI ethics guidelines from bodies such as the IEEE and OECD carry no direct enforcement power.

  3. US AI regulation is split between shifting federal executive orders and a growing set of state laws, with the December 2025 order directing agencies to challenge conflicting state laws and condition some funding on compliance.

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Up nextHow is AI regulated compared with other industries?How does the regulation of artificial intelligence compare with how other industries are regulated?

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Sources

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  1. 1
    Regulation of artificial intelligence (Wikipedia)
    WikipediaPublished Oct 12, 2026Checked Oct 14, 2026
    “Regulation of artificial intelligence is the development of public sector policies and laws for promoting and regulating artificial intelligence (AI). The regulatory and policy landscape for AI is an emerging issue in jurisdictions worldwide, including for international organizations without direct enforcement power like the IEEE or the OECD. Since 2016, numerous AI ethics guidelines have been published in order to maintain social control over the technology. Furthermore, organizations deploying AI have a central role to play in creating and implementing trustworthy AI, adhering to established principles, and taking accountability for mitigating risks. The European Union adopted in 2024 a common legal framework for AI with the AI Act. AI governance is a term used in policy, industry, and academic contexts to describe how AI systems are directed and overseen. A 2025 systematic literature review defined it as encompassing the questions of who is accountable for AI systems, what elements are governed, when governance occurs within the development lifecycle, and how it is implemented through frameworks, tools, or models.”
  2. 2
    Regulation of artificial intelligence in the United States (Wikipedia)
    WikipediaPublished Oct 12, 2026Checked Oct 14, 2026
    “The United States federal government and state governments have developed some regulation of artificial intelligence, including executive orders, federal laws, and state laws. Federal agencies have also developed some sector-specific regulations related to AI. At the federal level, the Biden administration released an October 2023 executive order about AI safety and security, Executive Order 14110, with directives related to AI development and deployment. President Trump revoked that executive order in January 2025 and issued Executive Order 14179. In December 2025, President Trump signed Executive Order 14365, an executive order directing federal agencies to develop a unified national approach to AI policy, evaluate state AI laws for potential conflicts, challenge them through legal action, and condition certain federal funding on state compliance, while exempting state laws related to child safety, data center infrastructure, and state government procurement. In 2025, Congress passed legislation targeting AI-generated deepfakes, the TAKE IT DOWN Act. Several U.S. states have enacted laws related to artificial intelligence. Some are already in effect, including in California.”
  3. 3
    High-risk without safeguards? The EU AI Act and the push for deregulation of medical AI.
    BMJ digital health & AI (Van et al.)Published Sep 30, 2026Checked Oct 14, 2026
    “This narrative review analyses the Health Innovation Package and related legislative developments under the EU simplification agenda and examines their impact on the relationship between the AI Act and medical device law. It shows that the proposed reform would retain the high-risk classification of AI-enabled medical devices while removing most associated AI Act obligations. In effect, this decouples risk classification from the safeguards that give it regulatory meaning, including requirements on data governance, risk management, human oversight and postmarket monitoring. Rather than resolving regulatory overlap, the amendments shift the centre of gravity back to product-focused medical device law without ensuring equivalent AI-specific safeguards. These changes may narrow attention to fundamental rights, weaken oversight in clinical use and increase legal uncertainty regarding accountability and responsibility. In a domain where AI systems directly shape clinical decisions and patient outcomes, these changes risk undermining the conditions for safe, equitable and accountable deployment of medical AI.”
  4. 4
    When hospitals build their own AI: a comparison of the EU and US regulatory framework.
    BMJ digital health & AI (Palmieri et al.)Published Sep 17, 2026Checked Oct 14, 2026
    “Hospitals are increasingly shifting from being passive purchasers of artificial intelligence (AI) systems to active developers of medical AI, particularly in the form of in-hospital machine learning tools tailored to local clinical needs. This paper examines how the European Union (EU) and the USA regulate in-hospital-developed AI-based medical devices, focusing on the legal and institutional conditions that shape innovation, oversight and diffusion. Through a comparative analysis across three dimensions-responsiveness to clinical need, distribution of innovative capacity and pathways for scaling and diffusion-the paper shows that both systems enable hospital-based innovation but embed it in different regulatory logics. The EU adopts a structured model that treats hospitals as regulated innovators operating under defined institutional obligations, whereas the USA relies on a more permissive and less institutionally differentiated framework in which hospital innovation emerges as a by-product of general software regulation.”
  5. 5
    Algorithmic governance at work: a legal-sociological and policy analysis of AI regulation, institutional power and labor rights.
    Frontiers in sociology (Olimid et al.)Published Aug 19, 2026Checked Oct 14, 2026
    “The results indicate that AI regulation across Europe, the Americas, and the Asia-Pacific is increasingly intersecting around human rights and personal data protection, risk-based governance, and accountability mechanisms, particularly in the employment environment. Legal frameworks emphasize transparency, non-discrimination, and the need for human oversight in AI-powered workplace decisions.ConclusionThe conclusions highlight that across Europe, the Americas and the Asia-Pacific, AI regulation is increasingly organized around six dimensions: protection of human rights and data privacy in the workplace; governance frameworks addressing reskilling, job transformation and adaptation to AI-driven work models; risk-based oversight of AI systems; AI civil liability regimes affecting employee rights and HR practices; promotion of ethical AI to foster trust and mitigate bias; and strengthened monitoring, accountability and non-discrimination mechanisms.”
  6. 6
    Governing AI for Mental Health: Fragmented State Approaches and the Case for a Federal Framework.
    JMIR mental health (Aldhalimi)Published Jul 28, 2026Checked Oct 14, 2026
    “This Viewpoint aims to identify the governance approaches that US states are using to regulate the use of AI in mental health and analyze the limitations of each. A 4-state case analysis was conducted using the statutory text of bills and laws in Illinois, Utah, New York, and Nevada. Two governance approaches were identified. The first regulates the use of AI in clinical contexts, and the second regulates the technology itself. Some states have combined elements of both approaches to address AI use more comprehensively. While these approaches aim to mitigate harm, they differ in where they believe risk lies in the use of AI for mental health support. The limitations of these divergent approaches include uneven protections for consumers and regulatory uncertainty for developers, vendors, deployers, and clinicians. Because AI in mental health operates across both clinical and consumer domains, neither approach alone can address the risks associated with its use for mental health support. A coordinated, risk-based federal regulatory floor is needed to ensure consistent protections across states.”
  7. 7
    AI is less regulated than milk, says Microsoft president
    BBC NewsPublished Oct 12, 2026Checked Oct 14, 2026
    “Brad Smith calls for global rules on AI, and says the UK is in the "best position" to lead the charge.”

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  • What enforcement actually looks like in practice — penalties, inspections, approvals or compliance costs — for AI compared with pharmaceuticals, finance, aviation and food safety is not covered by the available sources.

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  • How the December 2025 US executive order's review and legal challenge of state AI laws will interact with existing state statutes, and whether a federal floor emerges, remains unresolved.

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  • Whether the proposed EU amendments removing most AI Act obligations from high-risk medical AI are adopted, and whether medical device law alone provides equivalent safeguards, is still open.

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  • Comparisons here rest on health care, workplace and mental health examples; how AI rules interact with finance, aviation or food safety regimes is not documented in these sources.

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