The Global Race to Regulate AI Is Creating New Risks for Businesses

People may be using artificial intelligence (AI) more often, but they still want its use to be regulated. In fact, more than half of the population in a 2025 survey said they worried that AI regulation was moving toward a too-relaxed state. But a fair number of business leaders might argue otherwise.

Why would business leaders be hesitant to get behind AI regulations? Simply put, the global race to find different ways to regulate AI has created a new set of risks for businesses. And as strict AI guidelines and laws are put into place, organizations may find it harder to stay compliant and competitive.

For instance, the more AI regulations that are put into place, the greater the likelihood of a company unintentionally violating them. Even a single fine could be extraordinarily costly. Therefore, every company will have to make a concerted effort to stay compliant at all times.

Similarly, staying ahead of emerging AI regulatory expectations is likely to become a challenge for many companies. With each new level of regulation, businesses must change their processes and procedures to avoid non-compliance. The more regulations, the more changes each organization and its people will need to implement. And this is especially difficult for businesses that operate across multiple regions with differing AI regulatory standards and requirements.

What's another issue for businesses as AI regulations grow in number and complexity? Having to worry about AI compliance and regulation can slow internal corporate innovation. After all, it's hard to stay ahead when you have to be cautious with how you apply AI to everyday operations. As such, as companies scramble to avoid preventable risks, they may miss opportunities to innovate and compete.

These challenges may become even bigger for many small and mid-sized companies. Without the infrastructure to quickly adapt, they may be unable to keep pace with larger, appropriately funded enterprises that have already started to anticipate and navigate the aforementioned AI regulation-based risks.

Yet this doesn't mean that businesses are without strategies to overcome any barriers created by AI regulation. Plenty of corporations are putting systems and protocols in motion to alleviate AI regulatory stress.

What are the latest AI governance trends that are reducing the logistical hardships for businesses? Below are a few solutions.

1. Companies are teaming up with responsible AI consultants.

It's hardly unusual for companies to hire consultants, particularly when they want help creating AI systems and programs for their employees or customers. However, they're putting more emphasis on partnering with AI consulting firms that have a track record of promoting responsible AI.

One example is the association between a large agronomic brand and consulting firm EY, which recently received an "AI for Good" honor through the AI Breakthrough Awards. The brand felt comfortable choosing EY to help it create a unique proof-of-concept generative AI project since EY had a reputation for upholding the highest integrity standards in AI consulting. And the finished product met all the design specifications without opening the brand to regulatory problems.

In the future, AI consulting firms are likely to follow EY's lead and showcase their ethical principles and practices. That way, they can appeal to companies that want to use AI without putting their businesses at risk.

2. Companies are changing their organizational charts.

Tomorrow's organizational chart may look quite different due to the rise in AI regulations. Around a third of all companies have either created or plan to create the role of CAIO — Chief Artificial Intelligence Officer. This move shows how serious they are about embedding an authority for the AI they're using throughout their businesses.

With more people overseeing AI across whole organizations, fewer surprises should occur. Consequently, businesses may find that they trip over AI regulations far less frequently than they otherwise might.

Will the CAIO's department become a more influential impact on companies in the coming years? It's a good bet, since those AI departments will be the ones constructing and monitoring widespread corporate AI governance plans.

3. Companies are making hard decisions in terms of growth.

Recently, many businesses have begun to grow, including internationally. Yet with AI regulations, many have found that scaling up isn't as simple as they thought — so they're scaling back.

Indeed, the reaction of many businesses to the abundance of AI regulations has been a constriction of their sales and marketing to within national borders. Additionally, some small businesses are even beginning to withdraw from selling products in states with strict AI regulations and rules.

This narrowing might not last forever, but it may make sense in the short term. If nothing else, it can keep businesses from making decisions that might not currently make sense.

Are AI regulations needed? Absolutely. However, they're putting new pressures on businesses. Fortunately, many companies are finding ways to avoid the risks caused by AI regulations by strategically rethinking their partnerships, talent organization, and strategic operations.