AI is advancing faster than most governments can legislate, yet Italy has just taken a decisive step forward. As the first EU country to enact a comprehensive national AI law, Italy has laid down a marker for how technology, ethics, and law must converge. Innovation Consultant, Nima Karshenas and the DG Cities team analyse some of the recent developments and examine how they compare to current UK policy.
Italy’s new framework puts transparency, accountability and human oversight at the heart of AI adoption, while raising important questions for businesses, policy-makers and regulators across Europe and beyond.
A human-centred approach
At its core, Italy’s law emphasises that AI systems in sensitive domains, such as healthcare, education, justice and the workplace must remain under meaningful human control. Algorithms cannot be left to decide in isolation. This principle aligns with the EU’s broader AI Act, but goes further in specifying human oversight as a safeguard. For urban systems and smart cities, this means that automated decisions about traffic, energy or surveillance will need built-in transparency and human checks.
Perhaps the most striking element of the law is its criminalisation of harmful AI misuse. Deepfakes, identity theft and AI-enabled fraud will carry prison sentences of up to five years. The message is clear: AI creativity must not come at the expense of truth, safety or trust. For local authorities, civic organisations and media outlets, this raises the stakes in how AI-generated content is monitored, labelled and communicated (and potential confusion and inconsistency when it comes to oversight of global platforms).
Protecting future users
Children’s access to AI is also under the spotlight. Under-14s in Italy will now require parental consent to use AI-powered services. This introduces both a legal obligation and an ethical challenge for developers: how to design AI systems that are safe, inclusive and respectful of young users. For those working in education technology and youth engagement, Italy’s stance offers both a warning and an opportunity to lead responsibly. This is an area DG Cities has been focused on in the UK, the development of ethical, effective AI tools and services that support rather than harm or exclude the citizens they are intended to benefit.
Intellectual property
The law also addresses copyright and originality. Works produced with AI assistance can be protected, but only if they show genuine intellectual effort from a human creator. Meanwhile, text and data mining is restricted to non-copyrighted material or authorised scientific research. This nuance will shape how researchers, artists and businesses leverage AI for creative and analytical purposes.
To balance its strictures, Italy has announced a €1 billion investment fund to support AI, cybersecurity, and quantum technologies. The dual approach of tight regulation paired with targeted funding signals a strategic recognition that innovation and oversight must move together. For startups and SMEs, this raises a critical question: how can they stay agile and compliant while competing with global players?
Implications for cities and citizens
For cities exploring AI-driven services, Italy’s model has direct relevance. From predictive policing to autonomous transport, every deployment will now need to be tested not only for efficiency but also for legality, ethics and social trust. The law could become a catalyst for more participatory models of AI governance, where citizens are consulted and informed about how AI shapes their environments. An exciting move that puts people at the heart of innovation. I
In the following table, we break down some of the key legislative and policy differences between Italy and the UK…
What next?
Italy’s law may be the first of its kind in Europe, but it won’t be the last. Other governments will be watching closely to see how effectively it can be enforced and whether it builds public trust without stifling innovation. AI adoption in cities, businesses, and public services will be shaped not just by what technology can do, but by what society deems acceptable. Italy has drawn a line in the sand. The question now is: who will follow, and how quickly?
