James Geoghegan (Dublin Bay South, Fine Gael)
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What progress has been made by the Department on the creation of an operational AI regulatory sandbox by 2 August 2026, in line with the EU AI Act?

Alan Dillon (Mayo, Fine Gael)
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As Deputy Geoghegan is aware, the EU Artificial Intelligence Act entered into force in August 2024 and provides a harmonised regulatory framework for AI systems developed or deployed in the EU. It is designed to provide a high level of protection to people's health, safety and fundamental rights, while simultaneously promoting the adoption of human-centric, trustworthy AI. Its provisions will start to apply in a phased manner over the period to August 2027.

Earlier this year, the Government agreed to adopt a distributed model of competent authorities, leveraging the State's established sectoral regulatory authorities, to carry out supervisory and enforcement roles for the purposes of the AI Act. The Department is leading across government on the national implementation of the AI Act, and officials are working closely with colleagues in other Departments to devise the optimal configuration of a national competitive authority for the Act to ensure comprehensive, robust and effective implementation in Ireland.

To date, 13 public bodies have been designated as market surveillance authorities and four as notifying authorities, with some of these public bodies having a dual role. The Department of Enterprise, Tourism and Employment has also been designated to act as Ireland's single point of contact, as required by the AI Act, to facilitate co-ordination and to provide a number of centralised functions for the distributed model until a new independent entity, the AI office of Ireland, is established on a statutory basis to carry out this role.

As Deputy Geoghegan noted, the AI Act stipulates that member states should ensure their competent authorities establish at least one AI regulatory sandbox at national level to be operational by 2 August 2026. The AI Act introduces AI regulatory sandboxes as a key mechanism to foster innovation. They should aim to enhance legal certainty for innovators and the competent authorities' oversight and understanding of the opportunities, emerging risks and impacts of AI use.

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They should facilitate regulatory learning for both authorities and businesses. The participation in the AI regulatory sandbox should focus on issues that raise legal uncertainty for providers and prospective providers to innovate, experiment with AI in the European Union and contribute to evidence-based regulatory learning.

The AI office of Ireland will act as the central co-ordinating body for the EU AI Act and provide a focal point for the promotion and adoption of transparent and safe AI in Ireland to ensure that we fully capture the strategic opportunity that AI presents. The office will also be responsible for ensuring the timely establishment of the national AI regulatory sandbox.

It is important to note that in addition to preparing practical guidance to support member states setting up national sandboxes, the European Commission is also required to adopt implementing acts for sandboxes, setting out principles regarding participation, co-operation and procedures. Officials are actively involved in EU working groups related to these matters and we await the first drafts of these proposals from the Commission, which are expected in the first quarter of 2026.

The Department will continue to engage with the European Commission, other member states, industry, the SME sector and our regulators to look for opportunities to help inform and shape preparations and to identify opportunities to collaborate in establishing an operational AI regulatory sandbox.

James Geoghegan (Dublin Bay South, Fine Gael)
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I thank the Minister of State for the reply. He indicated the establishment of the AI office will be crucial in respect of the regulatory sandbox. I look forward to primary legislation being introduced on this and to it coming before the Committee on Artificial Intelligence, of which I am Vice Chair. One of the things that struck me when we were in Estonia recently at a digital summit was just how far ahead some other EU countries are in the adaptation of AI. What the Department is doing in respect of ensuring small businesses in the enterprise sector can stay competitive by harnessing the benefits of AI is a model that other countries could emulate. Beyond the Department of enterprise, we could go a lot further. I am heartened to hear there is a lot of cross collaboration taking place in respect of the establishment of the AI office. Does the Minister of State agree that the forthcoming EU Presidency could create a great opportunity for Ireland, given that we have lot of the large language model, LLM, companies based here, to have an AI summit to promote the benefits of AI and what it could bring to this country?

Alan Dillon (Mayo, Fine Gael)
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I thank Deputy Geoghegan for his interest in the AI Act. There are questions here today and certainly his welcome for the AI office is crucial. The Minister, Deputy Burke, allocated more than €1.4 million for its establishment, with the staffing plan now in place, and to ensure the sandbox is operational by August next year, which is not far away. We are also working with the EU digital innovation hubs and CeADAR to provide technical expertise and support for businesses. We need to continue to ensure the AI office can be functional in this time. For us, the sandbox is not another bureaucratic hurdle; it is certainly a tool that can support SMEs on their innovation journey. They can test AI systems safely, reduce compliance uncertainty and speed up market access. We have a good story to tell in regard to new start-ups in the AI sector. We want to become a leader among many competitive members in the EU to ensure we are at the fore of AI regulation. This initiative is very important on that journey.

James Geoghegan (Dublin Bay South, Fine Gael)
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In the enterprise sector, work is under way and has been done historically in Ireland when it comes to attracting investment and technology companies here. Now we see in Ireland the work Enterprise Ireland has done in supporting the hyper scaling of technology companies and start-ups. We saw some measures in the budget and, hopefully, there are more to come in future to support the emergence of an indigenous technology industry here. Some of the steps we have taken could be adapted in other Departments. Perhaps we could see the leading role this Department is taking in other spheres, such as health and education. We can look at what other EU countries are doing. The hosting of the EU Presidency by Ireland presents a unique opportunity. A number of years ago when Estonia held the Presidency it created a digital summit. We could demonstrate that we are the lead in class when it comes to the regulation of AI and we could harness some of the benefits that are coming.

Alan Dillon (Mayo, Fine Gael)
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I agree with Deputy Geoghegan. It will be an important opportunity when Ireland takes over the Presidency to showcase our SMEs, the work we are doing in the AI sector and the steps we are taking in the Government. The AI office will have statutory independence, reporting annually to the Oireachtas and the AI committee. It will also co-ordinate regulators under a clear governance structure. Ireland has a long track record with regard to regulation and the integrity of the system we implement in many sectors, not only in technology but also in life science and medtech. We are a very attractive place to do business due to our regulations and our principles on integrity, justice and transparency. This is very important from an EU perspective as it gives us a competitive advantage. We want to ensure that participation in the AI Act allows us to have this openness and equal access to treatment among member states.