Artificial intelligence | UK Regulatory Outlook June 2026

UK updates 

Government unveils UK AI Hardware Plan and AI Economics Institute 

The government has announced the AI Hardware Plan, setting out how the UK intends to develop, deploy and scale the chips and semiconductor technologies underpinning AI. The plan aims to create opportunities for UK AI hardware firms to compete globally and secure the country's strategic advantage in this area. The EU is pursuing a similar agenda through its Technological Sovereignty Package, which includes the Chips Act 2.0 (see the EU updates section below for further details). 

The government has also introduced the AI Economics Institute (AIEI), a joint research organisation of HM Treasury and the Department for Science, Innovation and Technology, to assess AI's economic impacts. The AIEI will examine how AI is affecting productivity, labour markets and growth, including whether AI gains are broadly shared across regions, income groups, sectors and generations. It is not a policy-setting body; its role is to improve the quality and timeliness of the evidence on which government policy decisions rest. The AIEI will collaborate with businesses and frontier AI firms to understand AI adoption across the economy.  

Government launches AI Growth Labs starting with legal services  

A further government announcement relates to its AI Growth Labs initiative – regulatory sandboxes that will allow AI applications to be tested in a secure environment. Legal services have been chosen as the first sector to benefit from the project. The AI Growth Labs will provide tech innovators with a safe space in which to test innovative legal services products and discuss regulatory issues directly with regulators. The Information Commissioner's Office (ICO) has stated that it will collaborate with the Council for Licensed Conveyancers, the Solicitors Regulation Authority and the Legal Services Board on cross-regulatory challenges. 

The government states that applications for the AI Growth Labs will open later this summer for tech innovators in legal services, with the programme to be rolled out to other sectors later this year. 

UK paves the way for self-driving vehicle services 

The government has opened applications for operators to run taxi, bus and private hire-style self-driving vehicle services in Great Britain, with passengers potentially able to book journeys later in 2026.  

Services will be subject to government approval, including strict safety assessments to ensure the technology is protected against cyber and security threats. The pilot scheme intends to gather real-world evidence on how self-driving vehicles operate on everyday roads, including navigating busy urban streets, interacting with traffic and carrying passengers safely. Local transport authorities must also provide consent. 

Findings from the pilots will inform the development of self-driving vehicle regulations, which the government is currently progressing following a call for evidence that closed earlier in March. See the products section for details of the recently published consultation on the statement of safety principles. 

DRCF's call for views on consumer attitudes and AI 

The Digital Regulation Cooperation Forum (DRCF), comprising the ICO, Ofcom, the Competition and Markets Authority and the Financial Conduct Authority, is inviting views on the following topics:  

• Consumer attitudes. The DRCF is seeking insight into consumers' approaches to the risks of generative and agentic AI adoption, including the extent to which they are prepared to "tolerate risks in exchange for benefits of AI adoption". The deadline for responses is 3 July 2026. 
• Tools for managing AI risks. The DRCF is also seeking views on the tools and frameworks available to policymakers, regulators, industry and consumers to manage AI risks effectively, without unduly restricting AI opportunities and growth. The aim is to inform the policy discussion on AI risk mitigation. The deadline for responses is 2 September 2026. 

These calls for views form part of the DRCF's "Consumer interest and AI" project, which aims to gather insights and research from member regulators and other stakeholders, particularly consumer groups and civil society, on consumer attitudes to the risks posed by generative and agentic AI. 

ICO responds to government on AI innovation plan 

See the data law section. 

EU updates 

Final code of practice on marking and labelling of AI-generated content published 

The European Commission has published the final code of practice on marking and labelling of AI-generated content under the EU AI Act. The code is voluntary and aims to support providers and deployers of generative AI systems in complying with the AI Act's requirements for labelling and marking of AI-generated content in Article 50(2), (4) and (5) of the AI Act. 

The code consists of two sections: (i) on marking and detection of AI-generated and manipulated content applicable to providers of generative AI systems; and (ii) on labelling deepfakes and AI-generated and manipulated text applicable to deployers of AI systems.  

These obligations are officially set to take effect on 2 August 2026. However, this date is likely to change in relation to the watermarking obligations under Article 50(2) for systems placed on the market or put into service before 2 August 2026. That provision requires providers of AI systems to ensure that AI-generated content is marked in a machine-readable format and detectable as artificially generated or manipulated. An amendment provisionally agreed as part of the Digital Omnibus on AI would, if adopted, introduce a transitional period for providers of those existing systems, with a new deadline of 2 December 2026. 

Providers and deployers of generative AI systems may sign up to the code, which is currently undergoing an adequacy assessment by the Commission and the AI Board. Once approved, signatories will be able to rely on its measures to demonstrate compliance with the relevant obligations under the AI Act. Non-signatories will need to explain and document how their chosen measures ensure compliance. 

The code will be complemented by Commission guidelines on which the Commission consulted in May 2026 (see this Regulatory Outlook for more information). 

European Commission launches Technological Sovereignty Package covering chips, cloud and AI 

The European Commission has presented the European Technological Sovereignty Package, a set of measures to strengthen the EU's capacity in semiconductors, AI, cloud and open source. The package includes two legislative proposals: 

• The Chips Act 2.0, which builds on the progress made by the original Chips Act, and aims to introduce further measures to boost the EU's chips industry, reduce strategic dependencies and support the design and production of both mainstream chips and cutting-edge semiconductor technologies that power AI applications. 
• The Cloud and AI Development Act is a central part of the Commission's AI Continent Action Plan, which aims to make the EU a global leader in AI. The Act intends to streamline conditions for deploying cloud and data centre infrastructure across the EU, "at least tripling the EU's data centre capacity" within the next five to seven years, with a focus on sustainable and innovative facilities. It also aims to introduce an EU-wide framework to assess cloud and AI sovereignty and reduce strategic dependencies in critical digital infrastructure. 

The package also includes an Open Source Strategy intended to scale up open source alternatives in areas such as cloud, AI, cybersecurity and semiconductors. See this Insight for more information on the strategy.  

The package further includes a Strategic Roadmap for Digitalisation and AI in Energy, which addresses the increasing energy demand of digital infrastructure and sets out how AI and other digital solutions can support a clean, competitive and secure EU energy system.