Source: ProMarket

ProMarket presents research by Filippo Lancieri, Laura Edelson, and Stefan Bechtold analyzing the political economy of AI regulation as a dynamic game involving governments, companies, and other actors. The article outlines four possible local regulatory outcomes: no regulation, compliance, partial evasion, and market withdrawal.

At the global level, it identifies four governance futures: multiple local regimes, international harmonization, unilateral imposition (the “Brussels Effect”), and global fragmentation or “splinternet.” The authors highlight risks of regulatory capture where business interests dominate public goals, citing examples from the EU and US. Recent US policy shifts, including Executive Order 14179, exemplify strategic fragmentation, with countries asserting regulatory sovereignty even at economic costs. The article argues that short- to mid-term prospects for global AI governance lean toward strategic fragmentation rather than harmonization.