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UK Government Consults on Amending Mandatory Filing Obligations for AI Acquisitions

 |  January 26, 2024


Recent proposals to amend the UK’s national security investment screening regime suggest that investors may soon need to submit mandatory pre-closing filings to the UK Government when intending to invest in a wider range of companies engaged in developing generative artificial intelligence (AI). In November 2023, the UK Government initiated a Call for Evidence to gather input from stakeholders regarding potential amendments to the National Security and Investment Act (NSIA) regime. Among the considerations is whether generative AI, currently not directly covered by the AI filing trigger, should be explicitly included in the mandatory filing regime. Stakeholders have until January 15, 2024, to contribute to this Call for Evidence.

Understanding the NSIA Regime

The NSIA came into effect in early 2022, imposing mandatory filing requirements on investors acquiring certain control rights in specified “sensitive” sectors. These control rights include holdings of more than 25%, 50%, or 75% of voting rights or shares in a company, or having sufficient voting rights to influence or block resolutions governing the target company’s affairs. Transitioning between control thresholds, such as moving from holding over 25% to surpassing the 50% threshold, triggers a new filing requirement. A mandatory filing is necessary if the target company operates in the UK within one or more of 17 sensitive sectors, including defense, advanced robotics, satellites, space technology, and AI.

The blog outlines how the NSIA regime functions, its current coverage of AI-related investments, and the government’s proposals to potentially broaden the scope of AI activities encompassed by the regime, which could include generative AI.