Regulation whiplash is breaking businesses – here's how they can keep up Regulation has always been a moving target, but in 2025, businesses are experiencing something far more chaotic: regulation whiplash.

One moment, companies are scrambling to comply with new AI laws; the next, they're blindsided by shifting trade sanctions, White House executive orders, or a fresh wave of financial oversight. Just as they get a handle on one set of rules, the goalposts move again. Rapid regulatory churn is expensive, time-consuming, and actively damaging businesses' ability to innovate. Instead of focusing on growth, leadership teams are constantly firefighting compliance crises. Since ignoring regulation isn't an option, reducing the burden is now a critical need.

The AI governance rollercoaster
Before the EU AI Act is even fully implemented, President Trump has signaled a sharp rejection of risk-based rules, rescinding existing U.S. policy on Day 1 in office. The U.K. will end up taking a third way, while U.S. states and mid-sized markets from Australia to Asia will follow their own approaches, creating a fragmented, unpredictable legal landscape. For businesses operating across multiple jurisdictions, this is a nightmare. Do they design AI systems that meet the EU's strict compliance requirements, only to be outpaced by more lightly regulated competitors in the US? Do they create different models for different markets? And what happens when (inevitably) one country tightens its rules again?

Regulated industries in the firing line
Beyond AI, firms in regulated industries are facing a perfect storm of scrutiny. Compliance teams at financial firms are scrambling to interpret the latest rulings and requirements from the SEC. Everyone who receives grant funding or holds contracts with the U.S. Federal Government is finding their diversity and sustainability policies under attack. But in many other countries new supply chain due diligence laws are making companies responsible for ethical sourcing and limiting emissions. In the EU, the Corporate Sustainability Reporting Directive (CSRD) is dramatically increasing the level of detail required for ESG disclosures. When it comes to tech firms, the US is taking an increasingly interventionist approach to antitrust, and the EU's Digital Markets Act is forcing major changes in how digital platforms operate.

At the same time, the rules around data privacy continue to evolve. The patchwork of global data protection laws – from GDPR in the EU to state-level laws in the US and new frameworks emerging in Asia – means businesses must navigate a legal minefield to avoid hefty fines and reputational damage.

The rise of digital resilience mandates
In January, the EU's Digital Operational Resilience Act (DORA) came into force, introducing strict cybersecurity and operational resilience requirements for financial institutions and their third-party service providers. The problem is, many companies are still unclear on what compliance actually requires. DORA is designed to protect against systemic cyber risks, ensuring financial firms can withstand digital disruptions. But with such broad requirements, businesses are left with the bill of determining what does 'good' actually look like?

Why early-stage businesses need to embed compliance from day one
For startups and scaleups, building compliance into the business model from the beginning can future-proof against legal pitfalls that could derail growth. Last year's SEC fines handed down to four vendors over the Sunburst cyberattack disclosures are a stark reminder of the high stakes for companies navigating cybersecurity incidents.

The technical fixes for a data breach are merely the first of many legal and reputational steps that need to be taken. Regulators and customers are typically owed information about what occurred: and they need that information delivered with speed and accuracy. Imagine being able to check legal obligations across thousands or millions of contracts and dozens of regulatory frameworks within minutes — allowing you to prioritize same-day responses to those who need them. That's the sort of compliance advantage that AI use can confer to companies of any size.

The financial cost of non-compliance
For early-stage businesses especially, missing a key regulatory shift can be catastrophic. Unlike established enterprises with deep legal teams and crisis management budgets, startups can't afford massive fines or reputational damage. Take the ICO's (Information Commissioner's Office) multimillion-pound fines against businesses that mishandled customer data — they're a stark reminder that even small compliance missteps can have severe financial consequences. Beyond fines, startups that fail to comply with regulations risk losing the trust of customers, investors, and partners. Publicly traded companies may have greater financial buffers, but risk seeing their stock prices plummet when regulatory breaches are exposed. Just look at the EU's record-breaking fines against major tech firms for GDPR violations: these penalties not only cost billions but also led to long-term reputational harm and operational restrictions.

How businesses can fight back
So, how do businesses escape this cycle of regulatory chaos? They need to stop firefighting and start future-proofing.

1. Embrace automation and AI for compliance: AI-powered compliance tools can help businesses dynamically manage evolving regulations, and respond efficiently when risks are flagged, or breaches occur. Legal teams are increasingly using AI to monitor legislative changes, flag risks, and streamline reporting obligations. AI can even help you prioritise notification and reputation repair plans in the event of data breaches. For example at Robin AI, we recently helped an American biotech company to complete a data breach response. Humans working alone would have taken a month to get the job done, but humans amplified by AI got it done in 3 days, saving the company over $2 million.
2. Build flexible compliance systems: Companies need adaptive frameworks that allow them to respond quickly to new regulations without overhauling entire operations. This means modular compliance strategies that can be adjusted as laws change, rather than rigid policies that become outdated overnight.
3. Take a proactive approach: Too many businesses wait until regulation lands before reacting. Large organisations can afford to lobby before rules are set in stone, but smaller organizations which don't have those resources can use AI to demonstrate compliance in advance of regulatory deadlines. Case in point: you need a tool that can extract unstructured data from hundreds of documents, and turn it into structured data that demonstrates compliance.
4. Collaborate: No business can navigate this alone. Industry-wide collaboration can help companies share insights, pool resources, and create best practices that keep them ahead of the curve.

Regulation whiplash isn't going away. If anything, it's only going to accelerate as geopolitical tensions, political turnover, and technological disruption continue to shape new laws at a breakneck pace. The businesses that succeed won't be the ones scrambling to react every time the rules change. They'll be the ones that build resilience into their systems, anticipate change before it happens, and leverage technology to stay ahead.