Italy is establishing a €1 billion AI fund and contemplating new penalties for misuse of the expertise

With support from state lender Cassa Depositi e Prestiti (CDP), Italy is committing €1 billion to AI development over the next five years.

Prime Minister Giorgia Meloni first announced the plan for a dedicated AI fund last month. “The purpose of this mechanism is clearly to act as a multiplier and attract further investments,” Meloni said in a video message.

CDP's venture capital division will provide the capital, divided into three areas. Around €580 million will be invested in startups, while €300 million will go to more mature companies ready to scale abroad.

The remaining 120 million euros will go towards technology transfer from university research to the market.

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Meanwhile, Italy is also working on its own AI legislation, which will establish complementary rules to the EU's AI law.

“This technology can only achieve its full potential if it is developed within ethical rules that focus on people and their rights and needs,” said Meloni. “This is the compass that has guided and will continue to guide our work at all levels.”

Part of the bill includes possible stiff penalties for crimes aided by AI tools, sources familiar with the matter told Reuters. Crimes include money laundering, market manipulation and copyright infringement. It is still unclear when and whether the law will come into force.

Italy's new investment plan and expected legislation both reflect the EU's broader move to not only strengthen innovation and economic competitiveness in this area, but also to set guardrails to mitigate potential risks.