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[2601.08005] Internal Deployment Gaps in AI Regulation
Summary
This article examines the regulatory gaps in AI deployment within organizations, highlighting issues that allow internal systems to evade oversight and suggesting potential solutions.
Why It Matters
As AI technologies become increasingly integrated into business operations, understanding regulatory gaps is crucial for ensuring accountability and safety. This paper sheds light on overlooked internal deployments that could pose risks if not adequately regulated, prompting necessary discussions among policymakers and industry leaders.
Key Takeaways
- Internal AI deployments often escape regulatory scrutiny due to scope ambiguity.
- Current compliance assessments may not reflect the evolving nature of AI systems.
- Information asymmetries hinder effective oversight of internally deployed AI.
Computer Science > Artificial Intelligence arXiv:2601.08005 (cs) [Submitted on 12 Jan 2026 (v1), last revised 14 Feb 2026 (this version, v3)] Title:Internal Deployment Gaps in AI Regulation Authors:Joe Kwon, Stephen Casper View a PDF of the paper titled Internal Deployment Gaps in AI Regulation, by Joe Kwon and Stephen Casper View PDF HTML (experimental) Abstract:Frontier AI regulations primarily focus on systems deployed to external users, where deployment is more visible and subject to outside scrutiny. However, high-stakes applications can occur internally when companies deploy highly capable systems within their own organizations, such as for automating R&D, accelerating critical business processes, and handling sensitive proprietary data. This paper examines how frontier AI regulations in the United States and European Union in 2025 handle internal deployment. We identify three gaps that could cause internally-deployed systems to evade intended oversight: (1) scope ambiguity that allows internal systems to evade regulatory obligations, (2) point-in-time compliance assessments that fail to capture the continuous evolution of internal systems, and (3) information asymmetries that subvert regulatory awareness and oversight. We then analyze why these gaps persist, examining tensions around measurability, incentives, and information access. Finally, we map potential approaches to address them and their associated tradeoffs. By understanding these patterns, we hope that pol...