In the few short weeks since the Government announced the AI Opportunities Action Plan, the AI landscape has shifted dramatically. From a new ‘Pro AI’ administration in Washington, to the unexpected release of DeepSeek, there’s a risk that the UK’s carefully curated plan may already be outdated.

January’s events have presented several very pressing questions for the UK’s future, especially if it wants to make the most of AI. Can innovation be balanced with consumer protection? And is it realistic for the UK to forge its own regulatory path as three opposing markets vie for AI supremacy – or will it be forced to take a side?

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The UK’s two most significant trading partners – the EU and the US – are locked in a race to assert AI leadership. The EU’s AI Act established many of the first AI regulations, and February’s AI Action Summit in Paris promises to be a major milestone for global governance efforts.

However, recent weeks have made clear that the EU remains a fair way behind the US. There are very few EU-headquartered companies – France’s Mistral.ai, the exception – with the potential to attract private capital close to the level announced in the US $500 billion Stargate plan. The fractured nature of its financial markets is a significant challenge for startups across Europe.

There is, however, an opportunity to fix this. European Commission President, Ursula Von der Leyen, has spoken positively about initiatives like EU.Inc to simplify startup financing across the bloc. The February Action Summit, renamed from Safety Summit, reflects efforts from President Macron and ENS-PSL Chair, Anne Bouverot, to pivot away from risk-based regulation towards aligning AI with public interest.

Additionally, the Chinese innovation of DeepSeek – specifically, its development and maintenance at a fraction of the price of OpenAI – is a sign that limitless financial resources are not necessary for success in this space. The stock markets have already indicated this point.

The EU still wants to prioritise regulation, with its rigorous consumer protections and Bouverot’s ambition for the Summit to cover the immense environmental impact of AI. This approach puts the EU in stark contrast with the US.

Trump and the AI ‘Tech Bros’

 Across the pond, Google and Microsoft have admitted that their AI strategies are at odds with their net-zero targets. And with the new administration’s stance on climate change, it seems unlikely to limit their endeavours in pursuit of the former.

This is emblematic of a new philosophy gripping Washington – one of unmitigated growth and American supremacy. The Trump Administration has begun to dismantle environmental protections, eliminate tech regulations and withdraw antitrust activity. This is before mentioning Stargate, backed by tech companies like Nvidia and OpenAI and chaired by Masayoshi Son of SoftBank.

Clearly, the US is going all out on cementing its position as the number one hub for tech investment and growth globally – and the major players are taking notice. Amazon, Google, Uber, Microsoft, and Meta all donated $1 million each to Trump’s inauguration, reflecting their desire to demonstrate goodwill towards the new President’s early agenda.

In other efforts to protect its global position, the US has restricted the export of its AI chips to the rest of the world. Though as shown by the DeepSeek development, these chips may be less vital than previously thought to compete with American AI ambitions – developments on this front will be worth keeping an eye on.

Sitting on the fence…or a constructive ‘third way’?

So how does the UK fit into this? Sitting between an EU approach with strong consumer protections across all sectors, and a US approach with a relatively unregulated market for AI firms, is it possible to implement regulation without losing our innovative edge? Is there a ‘third way’?

The UK has built a strong global reputation on regulatory standards which incorporate innovation. The FCA and other regulatory bodies have created innovation ‘sandboxes’ to help create regulation which balances rule-setting with the need for innovation and growth. This could be an opportunity for a third way.

DeepSeek’s recent advancements also illustrate a possible path forward. Heavily prioritising research and experimentation, DeepSeek made better use of software and designed more efficient systems since US export controls limited its access to advanced hardware.

The path forward for the UK is not straightforward, and the Government’s desire to find a third way could be impacted by the geopolitical factors at the heart of this issue. The ideal outcome from next month’s discussions in Paris is agreement on some type of global regulatory framework, but the global landscape makes this unlikely.

A third way approach by UK regulators could be an opportunity to use AI to drive economic growth yet still provide a degree of security, as AI continues to advance at an exponential rate.