Abstract
Abstract This Article explores the implications of Artificial Intelligence (AI)-driven innovation across sectors, highlighting the resulting legal uncertainties. Despite the transformative influence of AI in healthcare, retail, finance and more, regulatory responses to these developments are often contradictory, contributing to the opacity of the legal underpinnings of AI business. Our Article notes the common trend of commercializing AI tools amidst legal uncertainty, using innovative contractual solutions to secure claims. Over time, these innovations trigger overlooked legal conflicts, sometimes leading to outright bans on AI products due to negative impacts on some fundamental rights and democratic Governance. The core argument of our Article is that an over-reliance on co-regulatory strategies, such as those proposed by the European AI Act, exacerbates legal instability in emerging technological markets. This panorama creates an ’extended legal present’ when alternative legal expectations coexist, thus causing economic and political uncertainty that may elicit legal instability in the future. The concept of ’competing legal futures’ is introduced to illustrate how economic actors must bet on a legal future in the absence of guarantees that this future will materialize. To help analyze this complex narrative, we propose a theoretical framework for understanding legal, technological, and economic dynamics, highlighting anomalies in market exchanges within the co-regulatory model. Despite the focus on European developments, the practical and theoretical implications extend beyond the EU, making the Article relevant to a broader understanding of the legal-economic challenges posed by AI and digital innovation. We conclude by arguing for a course correction, proposing institutional diversification for resilient governance of legal innovation under uncertainty.
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