“It’s not that a country like Chile aspires to have a seat at the table with the world’s greatest powers, but rather that it already has one,” stated Aisén Etcheverry, Chile’s Minister of Science, Technology, Knowledge and Innovation earlier this year in an interview with France 24.
Her words capture Chile’s growing ambition to advance a pioneering bill to regulate artificial intelligence (AI), sparking a national debate over how to balance innovation with ethics.
The Latin American Artificial Intelligence Index (ILIA) recently confirmed Chile as the regional leader in AI thanks to high levels of investment in technological infrastructure, training programmes and supporting policies.
However, as President Gabriel Boric’s government seeks to expand the use of AI to drive modernization and sustainable growth in the country, there has been a sustained focus on discussions around implementing AI regulations to promote an “ethical, transparent and responsible use of AI for the benefit of all.”
“Some companies see regulations as an opportunity to grow, while others view it as a burden. But in the long run, those who resist innovation will lose ground in the market,” said Sebastian Martinez, General Manager at Nisum Chile, a technology consulting and software development company, while in conversation with Latin America Reports.
The government’s proposed AI Regulation bill, first introduced to Congress in May 2024, was approved by the Chamber of Deputies on August 4, 2025, and has proceeded to the Committee of Future, Science, Technology, Knowledge, and Innovation to widen the conversation by drawing on the views of experts from the public, private, academic and civil society sectors.
Whilst the government maintains that the implementation of this bill would promote innovation and responsible development aligned with international standards, critics warn that tight regulation could instead hinder the technological progress the country aims to achieve.
“Artificial intelligence isn’t a threat; it’s a tool. But unless we invest in educating people about it, fear will dominate, and Chile will miss out on the benefits this technology can bring,” Martinez noted.
The proposed AI regulation bill
President Boric has consistently emphasised the importance of investing in artificial intelligence as a key driver of development in Chile and Latin America, placing ambition, innovation and informed decision-making at the heart of his government’s approach.
Whilst acknowledging the risks posed by AI, the president has underscored the human role and responsibility in regulating advanced technologies to ensure ethical practice.
Speaking at the Congreso Futuro 2024 forum on artificial intelligence, Boric stated: “It is necessary to accompany its development with deep ethical reflection.”
These comments were made shortly before his government introduced its proposed bill on May 7, 2024, aimed at ensuring that the development and use of AI in Chile respects citizens’ rights while also promoting innovation and strengthening the state’s capacity to respond to the risks and challenges posed by the technology.
The bill is aligned with UNESCO’s Recommendation on the Ethics of AI, a framework that guided Chile in becoming the first country worldwide to apply and complete UNESCO’s Readiness Assessment Methodology (RAM).
Audrey Azoulay, Director-General of UNESCO, praised the initiative, stating: “Chile has emerged as a global leader in ethical AI governance, and we are proud that UNESCO has played an essential role in helping achieve this landmark.”
If approved, the bill aims to boost innovation in the business sector, supporting small and medium-sized enterprises (SMEs) especially, by fostering the technological conditions needed for growth, whilst maintaining regulatory oversight of AI systems.
The proposal also seeks to protect Chileans from algorithmic discrimination, a lack of transparency in AI interactions, as well as AI decision-making that could affect fundamental rights in areas such as healthcare, education, law and finance.
Chile’s approach to regulating AI
Chile’s proposed AI regulation adopts a risk-based framework, similar to the EU AI Act, classifying systems into four categories: unacceptable risk, high risk, limited risk, and no evident risk.
Under the proposal, AI systems considered to pose an unacceptable risk would be strictly banned. This includes technologies that undermine human dignity, such as those generating deepfakes or sexual content that exploits vulnerable groups like children and teenagers.
The bill also prohibits systems designed to manipulate emotions and influence decisions without informed consent, as well as those that collect or process facial biometric data without explicit permission.
High-risk AI systems are those that could significantly impact health, safety, fundamental constitutional rights, the environment, or consumer rights. AI tools used in recruitment processes to screen and filter job applications, for instance, fall under this category due to their potential bias and discrimination.
Those deemed to pose limited risk include AI systems that present minimal potential for manipulation, deception, or error in user interactions — such as public service chatbots that respond to queries within its area of competence. At the lowest tier, systems considered to carry no evident risk are tools like recommendation engines for films or music, technologies that under no circumstance pose harm to fundamental rights.
Under this model, AI systems will not require pre-market certification or review. Instead, each company is responsible for assessing and classifying its own systems, according to the established risk categories.
As explained by Minister Etcheverry, cases of non-compliance will lead to administrative sanctions imposed by the future Chilean Data Protection Agency, with decisions open to appeal before the country’s courts.
Innovation or limitation?
Whilst many actors in the public, private and civil society sectors support the proposed AI bill for its emphasis on responsible and ethical use of technology, experts have also raised concerns regarding the risk-based framework’s close alignment with EU standards and the potential bureaucracy that this model could introduce.
Sebastián Dueñas, researcher at the Law, Science and Technology Program at Pontificia Universidad Católica de Chile (UC), criticized the framework for its strict regulations and vague definition of what constitutes a “high-risk” system. He warned that such ambiguity could stifle innovation, discouraging developers who fear heavy sanctions.
The framework’s similarity to the EU AI Act has also raised doubts given the substantial differences between the Chilean context and that of the EU. Matías Aránguiz, professor at the Faculty of Law and deputy director of the Law, Science and Technology Program at UC, highlighted the disparity in budget and personnel as a major challenge in effectively implementing a similar risk-based regulatory approach in Chile.
In August, the Santiago Chamber of Commerce, a non-profit trade association representing over 2,500 companies across Chile’s key economic sectors, expressed concern about the bill’s potential impact.
The association warned that the rigidity of the proposed risk-based framework could negatively affect technological development, investment, and national competitiveness.
The association emphasized the need to foster responsible AI development in Chile whilst avoiding overly restrictive regulations that could limit innovation and the technology’s transformative potential.
Echoing this view, Dueñas commented: “Regulating AI is necessary, but doing so with the same rigidity as the European Union—just as they are trying to soften their own framework—would only add friction to Chilean development.”
For Martinez, on the other hand, what’s most needed is investment, rather than regulation. “Chile urgently needs to invest in AI. Without it, we risk falling further behind the U.S., and the gap between our markets will only continue to widen,” he stressed.
The government’s proposed AI regulation bill reflects more than two years of collaborative work, with input from the national AI Expert Committee, congressional commissions and members of both academia and civil society alike. However, the debate continues as actors from diverse sectors convened on August 14 to highlight both the progress made and the complexities that remain in navigating this technological challenge.
Featured image:
Image: Artificial intelligence illustration
Source: LawditSolicitors
License: Creative Commons Licenses
