Technology leaders are increasingly calling for stronger AI regulation as frontier AI systems advance faster than existing safeguards. Google DeepMind CEO Demis Hassabis warned that Artificial General Intelligence (AGI) may be only a few years away, describing its impact as potentially 10 times that of the Industrial Revolution, unfolding at 10 times the speed. Anthropic CEO Dario Amodei has warned that current scaling trends could create what he described as 'a country of geniuses in a datacentre' if they continue for another year or two. The urgency stems from the widening gap between AI capability and institutional capacity to test and contain these systems. As reported by Business Standard, Apeksha Kaushik, senior principal analyst at Gartner, noted that 'The pace at which AI development is moving has been the cause of this kind of call for regulations'.
UK banks' inability to access Anthropic's powerful Mythos AI model has sparked urgent calls for Britain to build its own AI capabilities and adopt a more strategic approach to the technology. As reported by Reuters, Harriet Rees, the Starling Bank chief information officer who was appointed 'AI champion' by the finance ministry in January, said Britain needed to build AI infrastructure and models while developing skills to ensure Britain is not fully reliant on U.S. technology. 'Now is the time for us to think very strategically about what we need to do to protect our leading position moving forward. Time really is of the essence; we don't have two years here,' Rees said in an interview with Reuters. Anthropic released Mythos in April to a select group that included U.S. lender JPMorgan, but only a very small number of banks — mainly the UK operations of U.S. lenders — were granted access in Britain. Big British lenders still do not have a timeline for when they expect to gain access to Mythos, with the CEO of one of Britain's largest banks saying last week that they still don't have a timeline.
Bank of England Governor Andrew Bailey cautioned against sweeping calls for deregulation, arguing that well-designed financial rules are essential for supporting sustainable economic growth. In a speech text released in advance by the Bank of England, Bailey said arguing simply for less regulation is 'unhelpfully reductive' and that not every rule on the central bank's books is perfectly formed. Speaking at the annual Mansion House dinner in London's financial district, Bailey said reducing regulation for its own sake would be an overly simplistic approach. He acknowledged that Britain was operating in a relatively soft economic environment, noting that 'Britain was operating in a fairly soft economic setting activity-wise' after earlier telling a parliament committee that renewed conflict between the United States and Iran was so far having a limited impact on inflation. As reported by Reuters, Bailey stressed that effective regulation remains a key pillar of financial stability and long-term growth, pushing back against broad calls for deregulation.
Industry experts are highlighting the mounting risks as AI adoption accelerates. According to Gartner's projections, unlawful AI-informed decision-making is expected to generate more than $10 billion in remediation costs globally by mid-2026. Manual compliance processes are projected to expose 75 per cent of regulated organisations to fines exceeding 5 per cent of global revenue by 2027, while AI regulatory violations could drive a 30 per cent increase in legal disputes involving technology companies by 2028. By 2030, enterprises are expected to spend more than $25 billion annually authenticating digital content to restore trust in online information. The risks span multiple categories including cyber risk with AI identifying vulnerabilities in less than 24 hours compared to weeks earlier, misinformation through AI-generated video and audio falsely attributed to public figures, privacy concerns with AI replicating voices and likenesses without informed consent, and autonomous decision-making in healthcare, defence, finance and pharmaceuticals where unchecked authority poses significant risks.
Bailey used his Mansion House speech to renew his call for the U.S. to take a more cooperative approach to tackling risks from frontier AI models. As chair of the Financial Stability Board, Bailey said regulators should coordinate the testing of frontier AI models before they are deployed widely, arguing that 'We need much stronger coordination of testing of frontier models before they go into wide circulation' and that this coordination needs to be 'coordinated internationally because no country can seal itself off from the cross-border nature of systems that are prevalent today'. His comments come as global tech leaders increasingly support stronger regulation. OpenAI has framed the arrival of AI with the advent of electricity, comparing frontier AI safety as a national security and public safety issue, particularly for models that could create cyber, chemical, biological, radiological or nuclear risks. At the United Nations, Yoshua Bengio, co-chair of the UN's Independent International Scientific Panel on AI, has warned that tests show frontier models can deceive humans, including by detecting when they are being evaluated. UN Secretary-General António Guterres has noted that AI reached one billion users in about two years, compared with 15 years for the internet, warning that the absence of aligned rules on testing and accountability protects no one.
The UK government has responded to the AI access crisis by developing comprehensive policy recommendations. Rees and fellow ministry appointee Rohit Dhawan, Lloyds Banking Group's head of AI, have developed a package of recommendations on AI policy and regulation that aim to boost use of the technology. The proposals, which also urge regulators to review the growing use of AI chatbots to deliver financial advice to consumers, were published on Tuesday as part of the government's financial services AI adoption plan ahead of finance minister Rachel Reeves' annual Mansion House speech. In a statement, Reeves said she has 'set out a serious plan for AI sovereignty, backing British companies to compete and win', adding that the AI Adoption Plan is central to achieving this across the financial services sector. To improve transparency and strengthen the resilience of AI companies on which banks already depend, Dhawan added that the UK could bring them within the remit of financial regulators by designating them as 'critical' providers to the finance sector, joining four U.S. cloud providers announced on Friday. As reported by Business Standard, Gaurav Shinh, founder and CEO of AI-native enterprise data platform SCIKIQ, noted that 'We have seen this with regulations such as the General Data Protection Regulation (GDPR), where Europe's privacy rules became a global benchmark because companies adopted them worldwide'.
