South Korea on Thursday introduced what it described as the world’s first comprehensive legal framework to regulate artificial intelligence, seeking to bolster trust and safety in the fast-growing sector, though startups warned the rules could slow innovation.

As part of its ambition to become one of the world’s top three AI powerhouses, the government said the new AI Basic Act is designed to position South Korea as a global leader in the field. The legislation has taken effect in full earlier than the European Union’s AI Act, which is being rolled out in stages through 2027.

Approaches to AI regulation remain divided globally. The United States has favoured a lighter regulatory touch to avoid constraining innovation, while China has already introduced certain rules and proposed the creation of an international body to coordinate global oversight.

Under South Korea’s framework, companies must ensure human oversight for so-called “high-impact” AI systems, including those used in areas such as nuclear safety, drinking water production, transport, healthcare and financial applications like credit evaluation and loan screening.

The rules also require companies to inform users in advance when products or services rely on high-impact or generative AI, and to clearly label AI-generated content when it may be difficult to distinguish from real-world output.