Regulating AI on Latin America’s Terms
Latin America faces a critical juncture that will shape its economic future: the opportunity to develop AI governance on its own terms or risk becoming a regulatory colony of Silicon Valley and Brussels.
Across the region, policymakers are increasingly recognizing that artificial intelligence is not merely another tech fad; it represents a rapid, structural shift affecting jobs, public services, and democratic processes. For instance, during last month’s municipal elections in Buenos Aires, synthetic audio impersonations of political figures circulated, highlighting the potential for misinformation. In Brazil, the government has engaged in conflicts with Meta over issues related to algorithmic transparency. Furthermore, educational systems across Latin America are quietly integrating AI tools into classrooms, often without sufficient oversight or guidelines.
The numbers paint a sobering picture: according to a recent IMF index, Latin America lags behind developed countries and China in AI readiness across four key areas: digital infrastructure, human capital and labor market policies, innovation and economic integration, and regulation. If executed intelligently and in a timely manner, regulation can not only mitigate risks associated with AI but also build public trust, attract responsible investment, and protect smaller innovators from being overwhelmed by tech giants.
Latin America has a narrow window to establish rules that are both protective and enabling, reflecting its own values and realities. Countries with clear regulatory frameworks, such as the U.K. in financial technology and cybersecurity, tend to attract more investment and innovation. Estonia’s model of digital governance has successfully drawn billions in tech investment. The cost of inaction is equally evident: nations without regulatory frameworks risk becoming dumping grounds for untested AI systems.
Smart AI Regulation as an Opportunity
For Latin America, effective AI regulation—balancing protection with innovation and adapting swiftly—also entails positioning the region as a preferred destination for responsible AI investment. At a time when other regions are over- or under-regulating, Latin America should not merely copy others or start from scratch; it should create its own AI regulations tailored to local needs and values.
Current Developments Across the Region
The ECLAC 2024 Digital Agenda, endorsed by all 33 member countries, calls for regional coordination, shared standards, and cross-border capacity building. Nonetheless, the regulatory landscape in Latin America remains fragmented, with countries at varying stages of development.
Brazil’s legislation, inspired by the EU AI Act, represents the most developed regulatory framework in the region, incorporating provisions for civil liability and tiered risk categories covering technologies such as facial recognition and automated hiring systems. Meanwhile, Chile has drafted legislation focused on transparency, fairness, and human oversight, building upon its National AI Policy.
Colombia, Peru, and Paraguay are developing proposals emphasizing data protection, algorithmic fairness, and ethical use in sectors like education and finance. While Argentina currently lacks formal legislation, recent Congressional hearings have highlighted pressing issues such as electoral manipulation and data privacy.
This is not just legislative noise; it signals the region’s search for direction and the need for a cohesive framework that makes sense.
Constructing a Smart Regulatory Framework
A recent primer on AI regulation for Latin American lawmakers proposes a tool designed to help avoid the pitfalls of copying templates from abroad. This framework is organized around four essential questions:
- What is the regulation’s purpose? Is it aimed at protecting rights, promoting innovation, or securing national interests? For example, China’s AI rules focus on state security, while the U.S. AI Bill of Rights emphasizes civil liberties.
- Which AI systems require heightened scrutiny? Different AI applications pose varying levels of risk. For instance, an AI scheduling assistant presents different challenges than an AI loan officer.
- Should the framework prioritize ethical guidelines, technical standards, or flexible sandboxes? Countries like Singapore and Canada illustrate contrasting approaches in their AI governance.
- What local context must be considered? Regulations should reflect the realities of the region, taking into account factors like linguistic diversity and institutional capacity.
A Regulatory Approach Tailored for Latin America
Countries in the region don’t need to start from scratch, but they should resist the temptation to adopt international frameworks without modification. Latin America should develop its own regulatory approach, emphasizing flexibility, inclusion, regional coordination, and capacity building.
Given the rapid pace of AI evolution, regulation must be agile. Pilot programs and regulatory sandboxes can serve as testing grounds for adaptation. Moreover, AI systems trained predominantly on English-language or Global North data often overlook the realities faced in Latin America. Regulations should mandate diversity in training data and promote open-source alternatives grounded in regional contexts.
A fragmented regulatory landscape invites companies to seek the most lenient jurisdictions, leading to regulatory arbitrage. Establishing shared data standards and joint governance bodies could enhance Latin America’s voice on the global stage.
Many governments currently lack the technical expertise necessary to audit, evaluate, or enforce AI regulations effectively. Therefore, investments in AI literacy, particularly among public servants, are essential. A regional training program could develop these capabilities while fostering ongoing coordination.
Promising initiatives include launching AI oversight labs in collaboration with universities, allowing local researchers to study AI in context, and creating regional sandboxes where startups receive real-time regulatory feedback during tool development.
An Opportunity to Lead in AI Governance
AI technology is advancing rapidly, but Latin America does not need to lag behind. By learning from global experiences and adapting them to its own context, the region can establish inclusive and realistic AI governance frameworks.
Rather than merely following trends, Latin America has the chance to lead by cultivating a regulatory ecosystem that is flexible, context-aware, and aligned with developmental priorities.
The next 18 months are crucial as the global regulatory landscape becomes increasingly polarized. This presents a unique opportunity for Latin America to define its own path in AI governance.
In early 2025, the United States made a decisive shift toward deregulation, prioritizing innovation, national security, and economic competitiveness over precautionary measures. This contrast to Europe’s more restrictive AI regulations highlights the importance of regional frameworks, which offer paths for both local innovation and collective coordination.
In this dynamic environment, Latin America can carve out a third way, fostering a regulatory framework that prioritizes transparency, evolves rapidly, and builds local capacity. Smart AI regulation in the region could demonstrate that it is possible to govern innovation without stifling it, thereby protecting its citizens while preparing for the future.
