10/06/25
Switzerland: Navigating Innovation And Regulation At The AI Crossroads
Switzerland is rapidly emerging as a leader in artificial intelligence (AI), with a thriving innovation ecosystem, and strong academic and corporate contributions. However, regulatory challenges are growing as the adoption of AI increases. As Switzerland navigates global AI governance trends, its approach aims to balance innovation with responsible oversight, ensuring long-term competitiveness and compliance.
The Swiss AI Landscape: A Nexus Of Innovation
Switzerland has long been synonymous with innovation, and its engagement with artificial intelligence is no exception. The nation's robust economy, advanced technological infrastructure, and supportive governmental policies have fostered a fertile environment for AI development. This article examines the current state of AI in Switzerland, highlighting key players, major developments, and the country's position relative to global counterparts. It also delves into recent regulatory advancements, including the Federal Council’s comprehensive report on AI regulation, and the Swiss Financial Market Supervisory Authority's (FINMA) 2024 guidance for financial institutions.
Market Size And Growth
Switzerland's AI market is experiencing a remarkable growth, driven by a confluence of factors that position the country as a significant player in the global AI arena.
According to projections, the Swiss AI market is expected to reach approximately USD 2.31 billion in 2025, with an anticipated compound annual growth rate (CAGR) of 27.32 per cent from 2025 to 2030, potentially achieving a market volume of USD 7.71 billion by 2030.[1] This substantial growth highlights the escalating integration of AI technologies across various sectors within the Swiss economy.
Key Players And Developments
Switzerland's AI ecosystem is bolstered by a synergy between academia, industry, and government initiatives. Renowned institutions such as the Swiss Federal Institute of Technology in Zurich (ETH Zurich) and the École Polytechnique Fédérale de Lausanne (EPFL) are at the forefront of AI research, contributing significantly to advancements in machine learning, robotics, and data science.
The private sector mirrors this dynamism, with numerous startups and incumbent firms embedding AI into their operations. Notably, Switzerland ranks third globally in potential for automation and augmentation, with 45.2 per cent of work time impacted by generative AI.[2] This reflects a substantial integration of AI technologies aimed at enhancing productivity and operational efficiency.
Global Standing And Investment
On the global stage, Switzerland's commitment to AI is evident through its strategic investments and policy frameworks. The country is recognised for its high level of innovation output, boasting the third-highest number of AI patents per capita worldwide, particularly in the health sector.[3] This positions Switzerland as a leader in AI-driven healthcare solutions, reflecting its traditional strength in life sciences.[4]
In terms of AI investment relative to economic output, Switzerland's expenditure on AI is approximately USD 4.01 per thousand dollars of GDP, indicating a robust commitment to AI development.[5] This strategic investment underscores the nation's dedication to maintaining its competitive edge in the rapidly evolving AI landscape.
Regulatory Developments: Balancing Innovation And Oversight
Switzerland's approach to AI regulation is characterised by a careful balance between fostering innovation and ensuring ethical standards.
Federal Council’s AI Report
In February 2025, the Federal Council published a comprehensive report on AI regulation, outlining three potential approaches:[6]
- Continuation of Topic- and Sector-Specific Regulatory Activities: This approach focuses on identifying and implementing regulatory needs on a case-by-case basis without overarching AI-specific legislation.
- Ratification of the Council of Europe's AI Convention: This could be pursued with minimum implementation, focusing on public sector obligations, or with more extensive implementation, encompassing both public and private sectors.
- Alignment with the EU AI Act: Adopting a risk-based approach similar to the EU's AI Act would harmonise regulations, potentially facilitating market access for Swiss AI products within the EU.
The report emphasises the importance of aligning with international standards while preserving Switzerland's innovation-friendly environment. In particular, the Federal Council confirmed that it will maintain Switzerland’s sector specific regulatory framework rather than implementing a general cross-sector AI law. Further, it confirmed that it will implement the Council of Europe’s AI Convention through sector-specific amendments to existing Swiss laws. Only key areas relevant to fundamental rights, such as data protection, will be subject to general cross-sectoral regulation. There will, therefore, be no Swiss equivalent to the EU AI Act. In addition to legislation, non-legally binding measures (such as self-disclosure agreements) will be developed to help implement the AI Convention. A draft law is expected for 2026.
This approach aims to reinforce Switzerland as a centre of innovation, to safeguard fundamental rights (including economic freedom), and to increase public trust in AI.
FINMA’s 2024 AI Guidance For Financial Institutions
Recognising the financial sector's early adoption of AI, FINMA issued Guidance 08/2024 in December 2024, highlighting key expectations:[7]
- Governance and Accountability: Institutions must establish clear governance structures, assigning responsibility for AI-related risks to senior management.
- Risk Classification and Data Quality: Maintaining an inventory of AI applications, classifying them based on risk levels, and ensuring high-quality input data, are imperative to mitigate biases and inaccuracies.
- Transparency and Explainability: AI models, particularly those used in customer interactions and regulatory compliance, must be interpretable and auditable to ensure accountability.
- Independent Oversight and Testing: Regular testing, validation, and independent audits are required to assess the robustness of AI systems.
- Third-Party Dependencies: Institutions must conduct due diligence on AI solutions procured from third-party vendors, ensuring compliance with Swiss financial regulations.
FINMA's guidance underscores a principle-based, technology-neutral approach that aligns with international best practices while allowing room for innovation.
Implications For Market Participants
The Federal Council’s published approach to AI regulation and FINMA’s guidance signify a shift toward greater regulatory clarity in Switzerland. For financial institutions, the increased focus on AI governance and risk management will require adjustments in compliance frameworks, particularly concerning model validation and explainability. AI developers and service providers must anticipate potential regulatory developments, ensuring their solutions align with evolving legal requirements.
From a broader perspective, these regulatory developments position Switzerland as a proactive participant in global AI governance discussions. While the country remains committed to fostering innovation, the evolving landscape suggests that more formal AI regulations may be introduced in the coming years.
The Way Forward Switzerland's regulatory approach to AI is at a pivotal juncture. While the country has traditionally adopted a sectoral and principle-based approach, increasing AI adoption and international regulatory trends are prompting a reassessment of existing frameworks. In view of financial market participants, FINMA has set its expectations by issuing guidance already in December 2024.
[1] Statista. 14 March 2025, Artificial Intelligence - Switzerland | Market Forecast.
[2] Accenture. 14 March 2025, Can Switzerland Lead the Way in Generative AI? | Accenture.
[3] Deep Knowledge Analytics/Swiss Cognitive: Artificial Intelligence Industry in Switzerland
Landscape Overview 2021 Q4. November 2021. AI in Switzerland - Report.
[4] Switzerland Global Enterprise. The Future of Digital Worlds: Artificial Intelligence. 14 March 2025. factsheet-artificial-intelligence-switzerland-s-ge-en-2024_without_title_v2_0.pdf.
[5] IFA magazine. AI Investment Race: Discover Which Countries Are Dominating the Future of Technology. 25 May 2024. AI Investment Race: Discover Which Countries Are Dominating the Future of Technology - IFA Magazine.
[6] Swiss Federal Council. Artificial Intelligence - Overview and Switzerland's regulatory approach. 12 February 2025. Artificial Intelligence.
[7] FINMA. FINMA-Guidance 08/2024 – Governance and risk management when using artificial intelligence. 18 December 2024. 20241218-finma-aufsichtsmitteilung-08-2024.pdf.
Andrea Trost
Andrea Trost is a senior associate at MLL Legal and is part of the Regulatory, FinTech & DLT Team. She has in-depth knowledge of financial market regulation, with a focus on disruptive and new technologies. She advises Web3 and FinTech companies in all phases of development, including formation, business model/product structuring and fundraising.
Dr. Reto Luthiger
Reto Luthiger is a Partner with MLL Legal and Co-Head of the Regulatory, FinTech & DLT Team. He is a financial market regulatory as well as a DLT/blockchain specialist. He advises and represents domestic and international clients in financial markets regulatory and civil law matters as well as proceedings before FINMA, self-regulatory organisations (SROs), supervisory organisations (SOs) other authorities and courts. He has wide-ranging experience in banking, securities brokerage, anti-money laundering, financial services, financial markets infrastructures and collective investment schemes as well as FinTech, InsurTech and DLT/blockchain.
