Taiwan’s AI strategy and regulatory framework

    By Ken-Ying Tseng, Lee and Li
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    The government of Taiwan has adopted a proactive approach to support the AI industry, promoting industrial development through policy measures and corresponding legal frameworks. In the latter half of 2024, the National Science and Technology Council (NSTC) introduced the draft AI Basic Act, which was submitted to the Executive Yuan (Taiwan’s cabinet) for review in early 2025.

    In parallel, Taiwan has amended laws to address AI-driven fraud, deepfake activities and election manipulation. The government also plans to enact new legislation on data governance and open data and to address the data-driven characteristics of AI.

    AI government policies

    Ken Ying Tseng
    Ken-Ying Tseng
    Partner
    Lee and Li
    Taipei
    Tel: +886 2 2763 8000 ext. 2179
    Email: kenying@leeandli.com

    Taiwan’s government actively supports the development of professional AI chips, AI hardware, and large-scale language models to promote the comprehensive growth of AI research and applications. Meanwhile, the manufacturing, finance, healthcare, agriculture and retail sectors are encouraged to integrate AI for digital transformation. These are the measures:

      1. Education and talent development. The Ministry of Education launched the Befriended with AI education programme to boost AI literacy at the compulsory education level. Universities and industry partners are collaborating to cultivate specialised AI and interdisciplinary talents, enhancing overall R&D capacity.
      2. AI chip technology and vertical applications. Leveraging Taiwan’s competitive advantage in semiconductors and ICT hardware, the AI on Chip Taiwan Alliance supports the development of cutting-edge AI chip technology and its industry-specific applications.
      3. AI computing and localised large-language model development. The National Centre for High-Performance Computing collaborated with private sector actors to develop TAIWANIA 2, a supercomputer dedicated to AI.

    Using the TAIWANIA 2 supercom-puter, the National Applied Research Laboratories launched TAIDE, a large-scale localised language model tailored to Taiwanese data. TAIDE uses public data (including judgments, Constitutional Court interpretations and other court decisions from Taiwan’s Judicial Yuan) to refine traditional Chinese-language models. The model supports languages such as Taiwanese and Hakka. It aims to integrate AI into the agriculture, education and automation industries.

      1. AI product and system evaluation. The Ministry of Digital Affairs (MODA), in co-operation with the National Institute of Cyber Security and the Industrial Technology Research Institute, has established the Artificial Intelligence Evaluation Centre.

    This centre will establish certification mechanisms and guidelines for AI products, as well as systems to ensure safer and more interpretable AI applications.

    Legal responses to AI challenges

    Despite rapid advances in AI technology, legal challenges remain. The Legislative Yuan is prioritising cases where AI or deepfake technology is used for fraudulent or election manipulation purposes. Meanwhile, MODA is drafting and revising legal frameworks for data governance. The NSTC’s draft AI Basic Act is intended to lay the groundwork for interagency collaboration and unified regulation of AI. These efforts fall into three core areas:

      1. Prevent fraud and regulate deepfakes. AI can be weaponised to spread false information or commit fraud. To address these risks, the government has adopted a strategy to use AI to combat AI fraud. The National Institute of Cyber Security uses AI algorithms to detect bot accounts and suspicious advertisements, facilitating rapid blocking and removal actions.

    Recognising that deepfakes or other synthetic technologies can compromise election integrity and facilitate money laundering or fraud, relevant amendments have been made to the Criminal Code, the Fraud Crime Hazard Prevention Act, the Public Officials Election and Recall Act, the Presidential and Vice Presidential Election and Recall Act, and the Money Laundering Control Act. These amendments establish criminal liability for disseminating false information or committing crimes using deepfake technology. They also require online advertising platforms to disclose instances where such technology is employed.

      1. Data governance and use. Open government data: High-quality training datasets are essential for AI research and development. MODA aims to expand access to official records (e.g. government documentation systems and various public data) and consolidate tens of thousands of datasets for large-scale language models such as TAIDE.

    New legislation on data innovation: MODA is drafting the Act for the Promotion of Data Innovation and Utilisation, which is aimed at increasing the accessibility of open data, providing shared data at low or no cost, and establishing cross-industry data-sharing mechanisms that facilitate the exchange of reliable, high-quality data.

    Mitigating data use risks: The use of data is subject to the Copyright Act, the Personal Data Protection Act and other relevant regulations. The Intellectual Property Office has issued a ruling on the use of AI, suggesting that without the consent or authorisation of the copyright holder of logo images, the use of AI technology to generate output may constitute a reproduction of others’ works. As a result, the vice premier of the Executive Yuan is overseeing a regulatory review involving all relevant ministries and agencies with the aim of creating a more flexible data governance framework.

    In parallel, the draft amendments to the Personal Data Protection Act will be rolled out with substantially updated provisions, and the Personal Data Protection Commission Prep-aratory Office will be established, bolstering personal data protection in an era where “data is the new oil of the digital economy”.

      1. Draft fundamental act on artificial intelligence. To ensure that AI technology aligns with human rights, privacy, industrial competitiveness and the public interest, the NSTC introduced the draft AI Basic Act in 2024, which was submitted to the Executive Yuan for review in 2025. The Executive Yuan is expected to forward it to the Legislative Yuan for enactment. Key elements of the draft include:

    Definition and scope of AI: The definition of AI is crucial because it determines the scope of the regulation. The draft act ensures broad coverage of AI techniques and approaches, ranging from basic knowledge-based algorithms to sophisticated neural networks.

    Guiding principles of AI: The draft act sets out guiding principles for AI R&D, including sustainability, human autonomy, privacy, data governance, security, transparency, explainability, fairness and accountability. It reflects international frameworks such as the OECD, G7, and the EU AI Act. In particular, the act highlights the need to promote and use non-sensitive data.

    Risk-based management: MODA will be given the authority to classify AI risks in line with international standards, with enforcement by respective sector-specific regulators. This provision aims to promote AI innovation within safety parameters, highlighting potential impacts on child welfare, consumer protection, labour markets and data privacy.

    Data privacy and openness: Data openness and governance must be mandated to ensure the availability of adequate, high-quality, non-sensitive data for AI models while protecting personal data.

    Adaptive legislation and cross-agency collaboration: Each ministry and agency must review its regulatory framework and report to the Executive Yuan to ensure alignment with the rapid technological evolution of AI. For example, the Ministry of Labour may implement vocational training programmes that focus on AI’s implications for the workforce, whereas the Ministry of Environment may need to work with other agencies to balance AI’s significant energy consumption with environmental sustainability.

    Conclusion

    Taiwan plays a critical role in the global AI landscape with its advanced and robust ICT and semiconductor industries, as well as expertise in server manufacturing. These achievements exemplify the nation’s industrial resilience and technological depth while highlighting the government’s effective policymaking, from nurturing AI talent and fostering industrial innovation to refining AI laws. Taiwan is diligently building a comprehensive policy and legal framework around AI, demonstrating its commitment and efficacy as it advances into the AI era.

    Lee and LiLEE AND LI, ATTORNEYS-AT-LAW
    8F, No 555, Sec 4, Zhongxiao E Rd
    Taipei 110055, Taiwan, ROC
    Tel: 886 2 2763 8000
    Email: attorneys@leeandli.com

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