The U.S. Senate made a pivotal decision, voting 99-1 to strike down a proposed 10-year ban on state-level AI regulation from a federal reconciliation bill. This move underscores a broader global tug-of-war over how to govern artificial intelligence a debate that places Latin America and the Caribbean at a critical crossroads. Sandwiched between the U.S.’s deregulatory push and the EU’s structured, rights-focused AI Act, the region faces a choice: align with one superpower’s vision, forge its own path, or risk being left behind in the digital economy. For a region where privacy laws echo the EU’s GDPR but economic ties often pull toward the U.S., the stakes are personal, political, and profoundly human.
The U.S. vs. EU Divide and How This Affects LatAm & The Caribbean
The U.S. approach to AI is a patchwork in progress. With no comprehensive federal AI law, the Senate’s rejection of the moratorium leaves states free to craft their own rules, potentially creating a mosaic of regulations. This follows President Trump’s January 2025 decision to scrap Biden-era AI safety guidelines, signaling a preference for innovation over restriction. The result? A fragmented landscape where businesses might face a tangle of state-specific AI laws, complicating compliance for companies operating across borders.
Contrast this with the EU, which rolled out its AI Act in August 2024. The Act is a landmark framework, emphasizing ethical AI development and user protections, with clear rules on how AI systems are built, deployed, and monitored. It builds on the GDPR’s foundation, prioritizing individual rights like privacy and data protection. The European Commission is already collaborating with standardization bodies to ensure the Act’s technical requirements are met, offering a cohesive model for others to follow.
For Latin America and the Caribbean, this split is more than academic. The region’s digital economy is growing 35% of its service exports in 2023 were digitally deliverable, per UN Trade and Development data—but it lags in AI adoption. Only 22% of countries have a public-sector AI strategy, and 78% lack frameworks for trustworthy algorithm management, according to the 2023 OECD-IDB Digital Government Index. With privacy laws in countries like Brazil and Argentina mirroring GDPR principles, the EU’s approach feels like a natural fit. Yet economic realities, including reliance on U.S. tech imports, pull the region toward Washington’s orbit.
A Region at a Crossroads
Latin America and the Caribbean aren’t just bystanders in this global debate—they’re players with unique challenges. The region has made strides in digital governance, with countries like Chile and Uruguay strengthening public services through digital strategies. But AI adoption is uneven, and infrastructure gaps persist. The OECD notes that the region scores just 22% in digital government implementation, compared to 53% for OECD countries. Building AI systems often requires U.S.-made hardware, and new U.S. tariff policies could hike costs, forcing governments to weigh economic pressures against regulatory ideals.
Privacy is a core concern here. Many regional data protection laws, like Brazil’s LGPD, share GDPR’s emphasis on individual rights. The EU’s AI Act aligns with this, tying AI governance to data protection and product safety. For citizens, this could mean AI systems that respect their personal data say, a health app that processes medical records without exposing them to third parties. But the U.S.’s lighter touch might appeal to governments and businesses eager to scale AI quickly, especially in sectors like agriculture or e-commerce, where AI could boost exports.
The catch? Choosing speed over safeguards risks eroding trust. A 2024 Pew survey found 68% of Latin Americans worry about how their data is used online. An AI system that mishandles personal information could deepen that skepticism, especially in a region with a history of grappling with surveillance and data breaches.
What’s at Stake
The AI governance debate isn’t just about tech it’s about values. The EU’s model prioritizes people, ensuring AI respects privacy and accountability. The U.S. approach bets on innovation, potentially at the cost of oversight. For Latin America and the Caribbean, the choice could shape everything from economic growth to individual freedoms. Aligning with the EU might strengthen data protections but require costly infrastructure upgrades. Leaning toward the U.S. could accelerate AI adoption but leave gaps in privacy safeguards, especially if states adopt inconsistent rules.
Then there’s the wildcard: U.S. tariffs. As trade tensions rise, the cost of AI hardware could force the region to seek alternatives, like Chinese suppliers, or double down on digital sovereignty. Countries like Mexico, with strong U.S. trade ties, might feel pressure to adopt a deregulatory stance, while others, like Brazil, could push for independent frameworks that balance growth and governance.
A Path Forward
The region doesn’t have to choose sides outright. It could blend the best of both worlds: the EU’s focus on rights with the U.S.’s drive for innovation. Steps like these could help:
- Build Regional Standards: Countries could collaborate on AI guidelines that align with GDPR-inspired laws but account for local needs, like Brazil’s push for AI in agriculture or the Caribbean’s focus on tourism tech.
- Invest in Infrastructure: Closing the digital gap through public-private partnerships or regional initiatives would reduce reliance on foreign hardware and boost AI capacity.
- Prioritize Privacy: Strengthening data protection enforcement, as Jamaica and Barbados have done, ensures AI systems respect users’ rights, building public trust.
- Engage Communities: Involving citizens in AI policy discussions, as Uruguay has with its digital agenda, can ensure governance reflects real-world needs, not just geopolitical pressures.
A Human-Centered Future
For Latin America and the Caribbean, AI governance isn’t just a policy puzzle—it’s a chance to redefine the region’s place in the digital world. The EU offers a blueprint for protecting people’s data and dignity; the U.S. pushes for speed and scale. But the region’s strength lies in its ability to chart its own course, one that honors its diverse cultures and shared commitment to privacy. As the global AI race heats up, the choices made now will shape not just economies but the trust people place in the technology that increasingly defines their lives.
