Responsibly Buying Artificial Intelligence: A ‘Regulatory Hallucination’

(2024) 77 Current Legal Problems, published ahead of print:

29 Pages Posted: 29 Nov 2023 Last revised: 11 Apr 2024

Date Written: November 24, 2023


Here, I focus on the UK’s approach to regulating public sector procurement and use of artificial intelligence (AI). Borrowing from the description of AI ‘hallucinations’ as plausible but incorrect answers given with high confidence by AI systems, I argue that UK policymaking is trapped in a ‘regulatory hallucination.’ The assertively promoted ‘pro-innovation’ regulatory approach is the incorrect answer to the challenge of regulating the procurement and use of AI by the public sector. I conceptualise the current strategy as ‘regulation by contract’ and identify two underpinning presumptions that make its deployment in the digital context particularly challenging. I show how neither the presumption of superiority of the public buyer over the tech provider, nor the related presumption that the public buyer is the rule-maker, necessarily hold in this context. In view of this, I argue that ‘regulating by contract’ public sector AI use is bound to be an ineffective strategy. Continuing with the pretence that public buyers can ‘confidently and responsibly procure AI technologies’ is an unjustified ‘regulatory hallucination’ that can generate individual harms and broader negative social effects as the public sector ramps up AI adoption and accumulates a potentially significant stock of AI deployments in a wide variety of areas of public sector activity. In view of the ineffectiveness of regulating public sector AI use by contract, I sketch an alternative strategy to boost the effectiveness of the goals of AI regulation and the protection of individual rights and collective interests through the creation of an independent authority.

Keywords: Public procurement, artificial intelligence, AI procurement, regulation, gatekeeping, public interest, regulatory hallucination, commercial determination, regulatory tunnelling, UK National AI Strategy

JEL Classification: D73, H57, K23, K24, K49, L59

Suggested Citation

Sanchez-Graells, Albert, Responsibly Buying Artificial Intelligence: A ‘Regulatory Hallucination’ (November 24, 2023). (2024) 77 Current Legal Problems, published ahead of print:, Available at SSRN: or

Albert Sanchez-Graells (Contact Author)

University of Bristol Law School ( email )

Law School Wills Memorial Building Queen's Road Br
Bristol, BS8 1RJ
United Kingdom

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