AI Regulation: The Global Landscape
2026 marks the year AI regulation became serious. The EU AI Act is fully enforceable. US Executive Orders shape industry practices. And Asia is finding its own path.
For businesses operating internationally, understanding this landscape isn't optional.
The EU AI Act
Key Requirements (In Effect) Risk-Based Classification:
Unacceptable : Banned (social scoring, subliminal manipulation)High-Risk : Heavy regulation (hiring, credit, healthcare)Limited Risk : Transparency required (chatbots, deepfakes)Minimal Risk : Largely unregulated (spam filters, games) Penalties:
Up to €35M or 7% global revenue
Graduated enforcement through 2027
What This Means for Business
AI Use Case Risk Level Requirements Hiring screening High Impact assessment, human oversight, logging Customer chatbot Limited Disclose AI nature Document summary Minimal None specific Credit scoring High Explainability, appeal rights Marketing personalization Limited Transparency about profiling
United States Approach
The US takes a sectoral rather than comprehensive approach:
Executive Order 14110 (Active):
Reporting requirements for large models
Safety testing mandates
Federal procurement standards
Sector-Specific:
FDA: AI medical devices
FTC: AI consumer protection
SEC: AI in financial services
DOL: AI in employment
State Level:
California AI Safety Bill (debated)
Various state-specific rules
China's Regulatory Framework
China has moved faster than anyone on AI regulation:
Regulation Focus Status Algorithm Recommendations Social media, e-commerce Enforced Deep Synthesis (Deepfakes) Identity verification Enforced Generative AI Rules Model registration, content Enforced Draft AI Law Comprehensive framework Pending
Southeast Asia Including Indonesia
Indonesia:
No comprehensive AI law yet
Draft Personal Data Protection (PDP) applies
Kominfo guidelines for AI use
Expected framework by 2027
Singapore:
AI Governance Framework (voluntary)
Model AI Governance Framework for Generative AI
Leading regional approach
ASEAN:
AI Governance Guidelines adopted
Interoperability efforts ongoing
Compliance Roadmap for Business
Audit AI usage — Document all AI tools and applicationsClassify risk levels — Map against EU frameworkAssess vendors — Ensure AI providers meet standardsUpdate disclosures — Inform users about AI interaction
Medium-Term (2026)
Implement logging — Maintain AI decision recordsBuild oversight — Human review processesTrain staff — AI literacy programsUpdate contracts — AI liability clauses
Long-Term (2027+)
Certification preparation — For high-risk applicationsContinuous monitoring — Regulatory change trackingIndustry collaboration — Best practice development
The Indonesia Angle
For businesses operating in Indonesia with international exposure:
EU customers? EU AI Act applies to youUS operations? Sectoral rules applyLocal only? Current flexibility, but prepare
The smart play: build to EU standards now. It's the highest bar and provides portability to any market.
Key Provisions for Common AI Uses
Application Key Requirement Timeline AI Chatbots Disclosure Now AI-Generated Content Labeling Now AI Hiring Tools Impact assessment Aug 2025 AI Credit Decisions Explainability Aug 2025 General Purpose AI Model cards Aug 2025
Emerging Trends
2026 Focus Areas:
Agentic AI — Regulation for autonomous systemsAI Liability — Who's responsible when AI fails?Open Source — Different rules for open models?Compute Governance — Regulating training infrastructure 2027+ Horizon:
Global interoperability frameworks
AI auditing standards
Mandatory AI impact assessments
Questions?
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Suggested questions:
Does EU AI Act apply to my Indonesian business? AI compliance requirements for chatbots? How to prepare for AI regulation? AI in hiring legal requirements? 
