Artificial intelligence faces different regulations in Northern Ireland and Britain as a new EU law is phased in from next month, just as the UK attempts to step up its global AI ambitions.
The UK’s exit from the EU left Northern Ireland with continued access to the bloc’s market for goods and subject to some EU laws. It put a politically sensitive customs border in the Irish Sea, which will now also extend to some digital operations under the EU’s AI Act.
The latest example of post-Brexit regulatory divergence follows differences between the UK and EU over permitted levels of arsenic in baby food and the size of fonts on chemical products and comes as the UK government on Monday announced a major investment in its AI capability.
Only about 1 per cent of the UK’s AI businesses are based in Northern Ireland but the region has dynamic software, fintech, healthcare and digital services industries which use AI in their products or operations and could find themselves covered by the new EU law.
“I don’t think people have really woken up to the fact that the digital border is going to be significant,” said Steve Aiken, a senior member of the Ulster Unionist Party which, like other pro-UK parties, is opposed to the customs border in the Irish Sea that Brexit created.
“We can’t be in a situation where the UK is, for instance, more aligned with the United States [on AI regulation] and Northern Ireland is stuck in the EU,” he said. Some “back office” functions for City of London businesses are based in Belfast, he added.
UK Prime Minister Sir Keir Starmer, who is keen to improve relations with the EU while keeping strong trade links with the US under incoming president Donald Trump, wrote in the Financial Times on Monday: “We don’t need to walk down a US or an EU path on AI regulation — we can go our own way, taking a distinctively British approach.”
The government has unveiled plans to build a new supercomputer and invest in a 20-fold increase in the UK’s sovereign computing power.
UK officials were not immediately available for comment on the prospect of regulatory divergence as the EU’s AI Act is phased in from February 2. Experts said the full scope of application in Northern Ireland was not clear.
But Ryan Donnelly, co-founder of Enzai, a Belfast-based AI governance platform advising Fortune 500 companies in healthcare, financial services, telecoms, infrastructure and other sectors, said Northern Ireland could “once again be in the crunch zone”.
Regulatory divergence between Britain and Northern Ireland could be “messy . . . and messy is not exactly very attractive to international AI businesses”, he added.
“The government is committed to ensuring that the UK remains a leading AI nation and Northern Ireland will benefit from our plan to exploit the economic growth that AI will bring,” a government spokesperson said, noting “substantive provisions” of the EU AI Act would only apply in the region following agreement at the EU-UK Withdrawal Agreement Joint Committee.
Unionist politicians last month activated for the first time a Brexit mechanism — the so-called Stormont Brake — designed to allow them to lodge a formal objection to the application of updated EU law in the region.
The UK government is evaluating their objections to changes to an EU law regarding the font on labels for chemical products, which they say could force costly relabelling.
But Barry Scannell, a partner and AI specialist at law firm William Fry in Dublin, anticipated little friction from the EU’s AI Act for companies already exporting to the bloc.
“I doubt having to comply with new regulations dealing with AI will be the straw that breaks the camel’s back because Northern Ireland is such a good place to be working on AI — the benefits outweigh the extra layer of bureaucracy,” he said.
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