With ChatGPT hype swirling, UK government urges regulators to come up with rules for A.I.
The ChatGPT and OpenAI emblem and website.
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The U.K. government on Wednesday published recommendations for the artificial intelligence industry, outlining an all-encompassing approach for regulating the technology at a time when it has reached frenzied levels of hype.
In a white paper to be put forward to Parliament, the Department for Science, Innovation and Technology (DSIT) will outline five principles it wants companies to follow. They are: safety, security and robustness; transparency and explainability; fairness; accountability and governance; and contestability and redress.
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Rather than establishing new regulations, the government is calling on regulators to apply existing regulations and inform companies about their obligations under the white paper.
It has tasked the Health and Safety Executive, the Equality and Human Rights Commission, and the Competition and Markets Authority with coming up with “tailored, context-specific approaches that suit the way AI is actually being used in their sectors.”
“Over the next twelve months, regulators will issue practical guidance to organisations, as well as other tools and resources like risk assessment templates, to set out how to implement these principles in their sectors,” the government said.
“When parliamentary time allows, legislation could be introduced to ensure regulators consider the principles consistently.”
Maya Pindeus, CEO and co-founder of AI startup Humanising Autonomy, said the government’s move marked a “first step” toward regulating AI.
“There does need to be a bit of a stronger narrative,” she said. “I hope to see that. This is kind of planting the seeds for this.”
However, she added, “Regulating technology as technology is incredibly difficult. You want it to advance; you don’t want to hinder any advancements when it impacts us in certain ways.”
The arrival of the recommendations is timely. ChatGPT, the popular AI chatbot developed by the Microsoft-backed company OpenAI, has driven a wave of demand for the technology, and people are using the tool for everything from penning school essays to drafting legal opinions.
ChatGPT has already become one of the fastest-growing consumer applications of all time, attracting 100 million monthly active users as of February. But experts have raised concerns about the negative implications of the technology, including the potential for plagiarism and discrimination against women and ethnic minorities.
AI ethicists are worried about biases in the data that trains AI models. Algorithms have been shown to have a tendency of being skewed in favor men — especially white men — putting women and minorities at a disadvantage.
Fears have also been raised about the possibility of jobs being lost to automation. On Tuesday, Goldman Sachs warned that as many as 300 million jobs could be at risk of being wiped out by generative AI products.
The government wants companies that incorporate AI into their businesses to ensure they provide an ample level of transparency about how their algorithms are developed and used. Organizations “should be able to communicate when and how it is used and explain a system’s decision-making process in an appropriate level of detail that matches the risks posed by the use of AI,” the DSIT said.
Companies should also offer users a way to contest rulings taken by AI-based tools, the DSIT said. User-generated platforms like Facebook, TikTok and YouTube often use automated systems to remove content flagged up as being against their guidelines.
AI, which is believed to contribute £3.7 billion ($4.6 billion) to the U.K. economy each year, should also “be used in a way which complies with the UK’s existing laws, for example the Equality Act 2010 or UK GDPR, and must not discriminate against individuals or create unfair commercial outcomes,” the DSIT added.
On Monday, Secretary of State Michelle Donelan visited the offices of AI startup DeepMind in London, a government spokesperson said.
“Artificial intelligence is no longer the stuff of science fiction, and the pace of AI development is staggering, so we need to have rules to make sure it is developed safely,” Donelan said in a statement Wednesday.
“Our new approach is based on strong principles so that people can trust businesses to unleash this technology of tomorrow.”
Lila Ibrahim, chief operating officer of DeepMind and a member of the U.K.’s AI Council, said AI is a “transformational technology,” but that it “can only reach its full potential if it is trusted, which requires public and private partnership in the spirit of pioneering responsibly.”
“The UK’s proposed context-driven approach will help regulation keep pace with the development of AI, support innovation and mitigate future risks,” Ibrahim said.
It comes after other countries have come up with their own respective regimes for regulating AI. In China, the government has required tech companies to hand over details on their prized recommendation algorithms, while the European Union has proposed regulations of its own for the industry.
Not everyone is convinced by the U.K. government’s approach to regulating AI. John Buyers, head of AI at the law firm Osborne Clarke, said the move to delegate responsibility for supervising the technology among regulators risks creating a “complicated regulatory patchwork full of holes.”
“The risk with the current approach is that an problematic AI system will need to present itself in the right format to trigger a regulator’s jurisdiction, and moreover the regulator in question will need to have the right enforcement powers in place to take decisive and effective action to remedy the harm caused and generate a sufficient deterrent effect to incentivise compliance in the industry,” Buyers told CNBC via email.
By contrast, the EU has proposed a “top down regulatory framework” when it comes to AI, he added.
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U.S. President Donald Trump (right) and C.C. Wei, chief executive officer of Taiwan Semiconductor Manufacturing Co. (left), shake hands during an announcement of an additional $100 billion into TSMC’s U.S. manufacturing at the White House in Washington, DC, U.S., on March 3, 2025.
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The latest version of U.S. President Donald Trump’s “big beautiful bill” could make it cheaper for semiconductor manufacturers to build plants in the U.S. as Washington continues its efforts to strengthen its domestic chip supply chain.
Under the bill, passed by the Senate Tuesday, tax credits for those semiconductor firms would rise to 35% from 25%. That’s more than the 30% increase that had made it into a draft version of the bill.
Companies eligible for the credits could include chipmakers such as Intel, Taiwan Semiconductor Manufacturing Company and Micron Technology, provided that they expand their advanced manufacturing in the U.S. ahead of a 2026 deadline.
The new provisions expand on tax incentives under the 2022 CHIPS and Science Act, which provided grants of $39 billion and loans of $75 billion for U.S.-based semiconductor manufacturing projects.
But before the expanded credits come into play, Trump’s sweeping domestic policy package will have to be passed again in the House, which narrowly passed its own version last month. The president has urged lawmakers to get the bill passed by July 4.
Trump versus Biden
Since Trump’s first term, Washington has been trying to onshore more of the advanced semiconductor supply chain from Asia, support its domestic players and limit China’s capabilities.
Although tax provisions in Trump’s sweeping policy bill expand on those in the Biden administration’s CHIPS Act, his overall approach to the semiconductor industry has been different.
Earlier this year, the president even called for a repeal of the CHIPS Act, though Republican lawmakers have been reluctant to act on that front. Still, U.S. Commerce Secretary Howard Lutnick said last month that the administration was renegotiating some of the Biden administration’s grants.
Trump has previously stated that tariffs, as opposed to the CHIPS Act grants, would be the best method of onshoring semiconductor production. The Trump administration is currently conducting an investigation into imports of semiconductor technology, which could result in new duties on the industry.
In recent months, a number of chipmakers with projects in the U.S. have ramped up planned investments there. That includes the world’s largest contract chipmaker, TSMC, as well as American chip companies such as Nvidia, Micron and GlobalFoundries.
According to Daniel Newman, CEO at tech advisory firm Futurum Group, the threat of Trump’s tariffs has created more urgency for semiconductor companies to expand U.S. capacity. If the increased investment tax credits come into law, those onshoring efforts are only expected to accelerate, he told CNBC.
“Given the risk of tariffs, increasing manufacturing in the U.S. remains a key consideration for these large semiconductor companies,” Newman said, adding that the tax credits could be seen as an opportunity to offset certain costs related to U.S.-based projects.
Elon Musk, chief executive officer of Tesla Inc., during a meeting between US President Donald Trump and Cyril Ramaphosa, South Africa’s president, not pictured, in the Oval Office of the White House in Washington, DC, US, on Wednesday, May 21, 2025.
Jim Lo Scalzo | Bloomberg | Getty Images
Tesla shares have dropped 7% from Friday’s closing price of $323.63 to the $300.71 close on Tuesday ahead of the company’s second-quarter deliveries report.
Wall Street analysts are expecting Tesla to report deliveries of around 387,000 — a 13% decline compared to deliveries of nearly 444,000 a year ago, according to a consensus compiled by FactSet. Prediction market Kalshi told CNBC on Tuesday that its traders forecast deliveries of around 364,000.
Shares in the electric vehicle maker had been rising after Tesla started a limited robotaxi service in Austin, Texas, in late June and CEO Elon Musk boasted of its first “driverless delivery” of a car to a customer there.
The stock price took a turn after Musk on Saturday reignited a feud with President Donald Trump over the One Big Beautiful Bill Act, the massive spending bill that the commander-in-chief endorsed. The bill is now heading for a final vote in the House.
That legislation would benefit higher-income households in the U.S. while slashing spending on programs such as Medicaid and food assistance.
Musk did not object to cuts to those specific programs. However, Musk on X said the bill would worsen the U.S. deficit and raise the debt ceiling. The bill includes tax cuts that would add around $3 trillion to the national debt over the next decade, according to an analysis by the Congressional Budget Office.
The Tesla CEO has also criticized aspects of the bill that would cut hundreds of billions of dollars in support for renewable energy development in the U.S. and phase out tax credits for electric vehicles.
Such changes could hurt Tesla as they are expected to lower EV sales by roughly 100,000 vehicles per year by 2035, according to think tank Energy Innovation.
The bill is also expected to reduce renewable energy development by more than 350 cumulative gigawatts in that same time period, according to Energy Innovation. That could pressure Tesla’s Energy division, which sells solar and battery energy storage systems to utilities and other clean energy project developers.
Trump told reporters at the White House on Tuesday that Musk was, “upset that he’s losing his EV mandate,” but that the tech CEO could “lose a lot more than that.” Trump was alluding to the subsidies, incentives and contracts that Musk’s many businesses have relied on.
SpaceX has received over $22 billion from work with the federal government since 2008, according to FedScout, which does federal spending and government contract research. That includes contracts from NASA, the U.S. Air Force and Space Force, among others.
Tesla has reported $11.8 billion in sales of “automotive regulatory credits,” or environmental credits, since 2015, according to an evaluation of the EV maker’s financial filings by Geoff Orazem, CEO of FedScout.
These incentives are largely derived from federal and state regulations in the U.S. that require automakers to sell some number of low-emission vehicles or buy credits from companies like Tesla, which often have an excess.
Regulatory credit sales go straight to Tesla’s bottom line. Credit revenue amounted to approximately 60% of Tesla’s net income in the second quarter of 2024.
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