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AI Sandbox

A controlled regulatory environment where companies can test AI innovations with relaxed rules under government supervision, allowing experimentation while managing risks.

The EU AI Act includes provisions for regulatory sandboxes, requiring each member state to establish at least one. The UK's Financial Conduct Authority has operated a fintech sandbox since 2016, serving as a model for AI-specific versions. Singapore, South Korea, and Japan have established AI sandboxes to attract innovation while maintaining oversight. Sandboxes allow startups to test AI applications in regulated sectors like healthcare, finance, and transportation without full compliance burdens. They provide regulators with practical insight into emerging AI capabilities and risks.

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