On September 24, 2026, a draft law on the use and development of artificial intelligence (the “Bill”) was submitted to the National Assembly. The Bill aims to regulate the implementation of Regulation (EU) 2024/1689, known as the “Artificial Intelligence Act” (“AI”), at the national level. In addition to designating the competent authorities and supervisory mechanisms, it provides for measures to promote investment, the adoption of AI in business and the public sector and the mitigation of risks arising from the malicious use of the technology. Since the European regulation is directly applicable, the Bill aims to establish the necessary national measures for its implementation, as well as to address additional issues related to the development and use of AI in Bulgaria.

One of the main objectives of the bill is to create more favourable conditions for the development and implementation of AI systems in Bulgaria. To this end, various forms of support are envisaged, including targeted funding, financial instruments and European programs, the promotion of investments under the Investment Promotion Act, and the provision of computing resources for research and development activities, including through high-performance computing technologies.

There are also plans to establish a single help centre through which businesses will be able to receive legal assistance and information regarding applicable AI regulations, available support options and measures to enhance staff qualifications. Such an initiative could help businesses navigate the new regulatory environment and implement these technologies in practice.

The Bill provides that certain open-source general-purpose AI models be treated as models developed for research purposes. These are models that, like those used in ChatGPT, can perform a variety of tasks - such as writing, translation, text analysis, and others - but, unlike ChatGPT, they provide open access to their parameters. The proposal applies to certain models trained on publicly available data and could ease the implementation of certain requirements of the European Artificial Intelligence Act, to the extent that the regulation permits such exceptions.

Special rules are also proposed for the use of publicly available personal data in the training of certain open AI models. The Bill provides that this activity shall be considered necessary for the performance of a task carried out in the public interest within the meaning of the GDPR, but subject to certain conditions. These conditions include measures to prevent the disclosure of personal data through the model, as well as a prohibition on the use of sensitive data, data on criminal convictions and offenses and personal data of children.

In the area of copyright, the Bill proposes that training AI models be treated as automated analysis of text and data - an activity for which the law allows certain exceptions to copyright protection. This would facilitate the use of protected content for AI training, but only in compliance with the conditions and limitations of the relevant legal exceptions.

Another important aspect of the bill is the broader use of AI in public administration. It provides for the implementation of such systems in the delivery of electronic administrative services, including through chatbots, as well as to support the work of civil servants and administrative bodies. It is proposed to establish a system to support the development and implementation of public policies, which would provide information when preparing impact assessments of legislative acts and when monitoring the implementation of strategic documents. Provision is also made for making administrative documents and other public information resources available to support the development of language models that operate in the Bulgarian language.

To facilitate the adoption of these technologies, training programs for civil servants and measures to enhance the skills of workers and employees in the private sector are planned. Funding for these training programs may also be provided through European programs. For businesses, this could create additional opportunities for staff training and for integrating AI into work processes.

With regard to national oversight, the draft Bill provides for the appointment of a national coordinator for the use and development of AI, who will ensure cooperation among the competent authorities and the coordination of key documents and policies in this area. It is proposed that oversight of AI systems be carried out by various competent authorities depending on the relevant sector, including the Bulgarian National Bank with regard to certain financial and payment services and the Financial Supervision Commission in the areas of insurance, investment activities, and pension insurance. Provisions are also made to address issues related to conformity assessment, the retention of documentation and record-keeping.

Alongside measures to promote the technology, the Bill also introduces additional restrictions on its use. These include bans on certain AI systems, including remote biometric identification systems, as well as special rules for protecting children’s personal data during model training, with explicitly provided exceptions. The proposed restrictions place additional emphasis on the protection of fundamental rights and the responsible use of the technology.

To safeguard national security, the Bill also provides for special powers for the State Agency for National Security regarding certain AI systems, including content recommendation systems used by very large online platforms. When such systems are identified as posing a high risk to national security, the provision of technical documentation, source code, information on the training data used, and other technical specifications may be required under the conditions set forth in the law. Mechanisms are also proposed to restrict certain types of illegal content generated by AI, including manipulated images and videos, as well as to enable the reporting of such content.

For violations of the prescribed requirements, the Bill also introduces administrative sanctions, including for the use of prohibited AI systems, the unlawful use of children’s personal data, and failure to comply with obligations to provide information to the competent authorities. In certain cases involving very large online platforms, the financial penalties provided for amount to approximately EUR 2.5 million under the proposed version of the bill.

Overall, the Bill represents an attempt to create a national framework that combines the promotion of investment and the adoption of AI with the necessary mechanisms for oversight and risk mitigation. For Bulgarian businesses, the proposed measures could open up new opportunities for financing, developing and using AI technologies, but at the same time raise questions regarding compliance with the new requirements and restrictions. The Bill is set to go through the parliamentary process, and the final content of the regulations will depend on the discussions and any amendments, including with regard to their compliance with applicable European legislation.

This article has been prepared for and is part of the Legal Digest issued by Penkov, Markov & Partners. The publications therein do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.