With the growing convergence of regulation and innovation in the UK’s financial sector, and with the UK Government having so far delegated responsibility for regulation of AI to its various sector regulators, the FCA has announced a strategic partnership with artificial intelligence computing company NVIDIA.

This partnership marks a pivotal moment in AI and the future of its adoption into the UK’s financial services market place.

Launch of the FCA AI Lab

In January 2025, the FCA introduced its “AI Lab” to deepen its “understanding of the risks and opportunities AI presents to consumers and markets.” The initiative also aims to support the “safe and responsible deployment of AI by firms” operating in the financial sector, which in turn is expected to inform its preferred future regulatory approach to the use and deployment of AI in financial services more generally.

After this initial phase, the FCA is now expanding the AI Lab in partnership with NVIDIA to create a new initiative: the Supercharged Sandbox, which will be available for firms to access starting in October 2025.

What is the Supercharged Sandbox?

Over a decade ago, the FCA launched its original regulatory sandbox to foster innovation in a controlled environment. The new Supercharged Sandbox enhances this concept by providing advanced AI capabilities to firms, especially startups and smaller institutions, that may lack the infrastructure to develop and test AI solutions independently.

Many financial institutions, particularly smaller firms and startups, struggle to access the computational power and technical expertise needed to develop and test AI solutions responsibly. NVIDIA will be applying its AI Enterprise Software, which is designed for firms in the “discovery and experiment phase” of AI development. The company will also be providing support, tooling, and resourcing to users to help accelerate AI innovation and development.

Through this collaboration, the FCA will be able to provide access to AI and regulatory guidance in a controlled environment. Firms can safely innovate and experiment with AI. It will enable users to efficiently train, refine and experiment with AI models. The Supercharged Sandbox will be available for firms to test early-stage proof of concepts (PoCs) from October 2025.

Implications for the sector

The new partnership has wide-reaching implications for the financial services sector. By lending regulatory credibility to AI experimentation, the FCA is encouraging broader adoption and investment in AI technologies.

Firms will be able to validate AI models more rapidly, accelerating innovation, and with regulatory oversight embedded in the innovation process, companies can better align their AI initiatives with compliance standards from the outset.

The Supercharged Sandbox represents a forward-thinking approach to AI in financial services. By combining regulatory insight with cutting-edge technology, the FCA and NVIDIA are laying the groundwork for a more innovative, inclusive, and secure financial ecosystem in the UK.

Wayne Gibbard is a partner in the Commercial team and leads the automotive finance practice for Shoosmiths. Alex Kirkhope is a partner in the Commercial team with a particular focus on technology and outsourcing, advising clients on all aspects of their business-critical IT systems and related business functions, as well as wider technology-based commercial contracts, software licensing and information law.