Examining Legal Avenues for Innovation Incentivization: A Focus on Creators of AI Software and Creative Machines

Abstract

Artificial Intelligence (AI), encompassing analogous technologies such as Machine Learning (ML), Deep Learning (DL), and Robotics, represents a profound capacity for machines to execute tasks traditionally requiring human intellect, fundamentally transforming modern societal sectors. The continued advancement of these creative machines demands substantial and consistent capital investment for research and development (R&D) to maintain competitive and technological superiority. This article explores the commercial and creative potential of AI and creative machines while addressing the critical challenges faced by their creators, specifically the massive upfront investment and restrictive regulatory barriers. It critically evaluates three primary legal and policy tools available for incentivizing innovation: strengthened tax incentives (specifically R&D tax credits), the appropriate application and scope of patent rights, and the establishment of flexible regulatory pathways. The analysis demonstrates that a supportive legal framework is essential to reward and sustain the efforts of AI innovators. Evidence suggests that policy tools like R&D tax incentives are highly effective, offering significant non-dilutive financing for startups. By strategically leveraging these mechanisms, the legal framework can substantially reduce innovation costs and risks, thereby driving the technological acceleration forecasted to increase Global GDP by up to 14% by 2030. The article concludes by advocating for the proactive strengthening of these policy instruments to secure predictable macroeconomic returns alongside sustained technological progress.

Keywords: Artificial Intelligence (AI), Innovation Incentivization, Creative Machines, Machine Learning (ML), Deep Learning (DL), Tax Incentives, Patent Rights, Regulatory Policy, R&D Tax Credits, Economic Growth.

DOI: 10.7176/JLPG/149-15

Publication date: December 28^th 2025