The technology secretary had announced a new blueprint for AI regulation in a bid to improve public services.
The government plans to slash bureaucracy and ramp up the safe adoption of AI to unlock its full potential.
Technology secretary Liz Kendall has announced plans to to look at how companies and innovators can test new AI products in real-world conditions, with some rules and regulations temporarily relaxed under strict supervision.
In these sandboxes, individual regulations are temporarily switched off or tweaked for a limited period of time in safe, controlled testing environments.
Initially they would be used in key sectors of the economy like healthcare, professional services, transport, and the use of robotics in advanced manufacturing.
The technology could help to speed up planning approvals, cut NHS waiting times, and drive growth and public trust.
Technology secretary Liz Kendall said: "To deliver national renewal, we need to overhaul the old approaches which have stifled enterprise and held back our innovators.
"We want to remove the needless red tape that slows progress so we can drive growth and modernise the public services people rely on every day.
"This isn’t about cutting corners – it’s about fast-tracking responsible innovations that will improve lives and deliver real benefits."
Meanwhile, a pot of £1 million is being set aside to support the Medicines and Healthcare products Regulatory Agency (MHRA) to pilot AI-assisted tools. This could speed up drug discovery, clinical trial assessments, and licensing to improve efficiency and consistency.