Spain’s AI sandbox: the key to local competitiveness in the European market

Antonio Tejeda Encinas, CEO of Meta Channel Corp, President of the Euro-American Committee of Digital Law - CEA Digital Law

The creation of Spain’s first regulatory sandbox for AI, set up under ‘Real Decreto 817/2023’ (Royal Decree 817/2023), is a pioneering step in the regulation of artificial intelligence technologies in Europe. This controlled environment allows Spanish companies to test their developments under supervision, ensuring that they comply with the EU Artificial Intelligence Act (Regulation (EU) 2024/1689) before they reach the market. However, while local SMEs and start-ups are adapting to these requirements, large foreign corporations with greater experience and resources are able to enter the market more quickly, putting local businesses at a competitive disadvantage.

For the sandbox to become a genuine resource that strengthens Spanish companies, the following are essential:

• Greater flexibility in processes: streamlining procedures and allowing parallel testing in low-risk phases, so as to cut lead times without sacrificing rigour.
• Financial and technical support: ensuring that SMEs receive not only funding but also technical and legal advice, so that they make the most of their time in the sandbox.
• Alignment with EU rules: ensuring that products comply with several regulatory frameworks, making them easier to adapt within the EU and minimising the regulatory burden across member states.
• Multinational compliance in Europe: using the sandbox to validate products against different European regulations, allowing faster integration into the market.
• Continuous review of the sandbox: adapting the sandbox regularly to market needs so that it remains agile and efficient for local businesses.

In short, Spain’s pioneering sandbox has the potential to turn regulatory compliance into a competitive advantage for Spanish companies in the European arena. With these improvements, we can ensure that local SMEs and start-ups compete effectively and consolidate their position in the European AI market.