[Editor’s note: despite criticism of Fida, the future framework for access to financial data, the European Commission is keeping this project--as it stands--in its 2025 work programme.]
Is Luxembourg lagging behind in implementing the EU’s AI regulation? The government’s strategy, expected before spring, is eagerly awaited. “I don’t think that other European countries have already got a big head start. It’s still early days. We have to believe in ourselves,” says , CEO of Proximus Luxembourg. For Hoffmann, who also chairs the Chamber of Commerce’s working group on AI, Luxembourg still has two key areas where it can set itself apart: the regulator and sandboxing.
In the first case, “it’s not so much the regulation itself that matters, but the way in which the regulator applies it: its agility, its interpretation of the rules, the way in which it supports businesses and formulates its opinions,” explains . “It’s a bit like choosing one of 27 banks: you opt for the one that offers the most attractive service. In the same way, a country needs to create an ecosystem that appeals to businesses.”
His hope is that the designated supervisory authority, the Commission nationale pour la protection des données (CNPD), will replicate the success of the Commission de surveillance du secteur financier (CSSF) in financial regulation. “Luxembourg already has a solid reputation in terms of regulation, with internationally recognised authorities. We need to continue along this path for the AI Act: adopt an intelligent approach, neither too strict nor too lax, but balanced, in the interests of the ecosystem. After all, arbitration is part of Luxembourg’s DNA: between German, French and other influences, we have always been able to strike the right balance.”
A problem of definitions
For Hoffmann, sandboxing is also essential if Luxembourg is to position itself competitively when it comes to AI. Member states are obliged to set up a “regulatory sandbox” and the CNPD has already launched its own, the “Sandkëscht,” as has the Luxembourg Institute of Science and Technology (List).
But beware of misunderstandings. The concept of a sandbox can refer to a framework in which certain legislative provisions are not applied. But this is not the philosophy of the Luxembourg government, which is talking instead about establishing a direct dialogue between regulators and companies in unregulated areas. The aim is to support AI players, understand their needs, guide them through the process and ensure that they always operate within a legal framework. The idea is also to give them the confidence they need to innovate with peace of mind.
Luxembourg needs to actively promote its ambition to become an AI hub.
“To attract startups, it is essential to offer a sandboxing tool that is accessible, easy to use and encourages exchange,” adds the CEO of Proximus Luxembourg. “The country has a solid ecosystem, driven by the Big Four and law firms. This asset, which has contributed to the development of the financial centre, can be exploited to structure a sandboxing ecosystem. We have the necessary skills, we just need to mobilise them effectively.”
But communication is crucial. “Luxembourg needs to actively promote its ambition to become an AI hub by leveraging its strengths on a global scale. I note the efforts of Luc Frieden, who has decided to make the subject of AI his own, and of Xavier Bettel in his role (foreign trade and prospecting). The example of the space sector is proof of this: a few years ago, the former economy minister, Etienne Schneider (LSAP), set out a bold vision that put the country on the map. It wasn’t just about legislating, but about telling a story capable of attracting major players.”
Today, sandboxing can play that role, according to Hoffmann. “Even if it gets off to a modest start, it can quickly become a magnet thanks to word of mouth. In the long term, it could encourage the major technology players, particularly American, to take a different view of Europe. At present, many of them avoid deploying their most advanced tools in Europe for fear of overly rigid regulation. “Sandboxing represents a pragmatic opportunity for openness,” he concludes, “a strong signal showing that Europe remains a fertile ground for innovation and for hosting cutting-edge technologies.”
[AI is] one of the few areas where the country’s size is not a limiting factor
Based in Luxembourg, Gcore--an international provider of cloud, edge computing, content delivery, hosting and cybersecurity solutions--is not directly involved in sandboxing. But its CEO and co-founder, , recognises its usefulness: “A sandbox in Luxembourg could be of interest to us and could help boost the local AI ecosystem. The country has the potential to become a key hub in this field, one of the few areas where the country’s size is not a limiting factor: what matters is talent. There are not as many restrictions as in other industries.”
Gcore chose Luxembourg for its favourable environment for IT companies targeting the European and global markets. “Although we are based here, our clients are international. Luxembourg has been instrumental in helping us expand globally. It would be fantastic if it played the same role in the field of AI. To achieve this, we need not only to adopt AI but also to export it. Sandboxing should support this ambition. It is crucial for Luxembourg to be recognised as a place where start-ups can establish themselves and grow sustainably.” Andre Reitenbach cites LetzAI as an initiative worth encouraging and hopes to see the emergence of a “Luxembourgish DeepSeek.”
How does Gcore intend to position itself within Luxembourg’s strategy? “We support this initiative and will contribute to this infrastructure with our services, experience, and models to make it happen in Luxembourg. It is essential that companies do not need to look elsewhere for the infrastructure and services required to develop their projects. This way, we can truly achieve a certain level of sovereignty, where everything can be created and developed from Europe.”
(Read Nasir Zubairi’s analysis on this topic in the March edition of Paperjam magazine, on newsstands on 26 February 2025.)
This article in French.