This article examines Taiwan’s approach to AI regulations, comparing it to the European Union’s (EU) AI Act. Highlighting the influence of Taiwan’s robust semiconductor industry, strategic partnerships with the United States, and its significant presence of small to medium-sized enterprises (SMEs), the article explores how these factors shape Taiwan’s flexible and adaptive regulatory strategy. It delves into the progression from Taiwan’s AI Action Plan 1.0 to AI Action Plan 2.0, and the formulation of the upcoming Basic AI Act, emphasising the importance of talent cultivation, technological advancement, industrial integration, and ethical frameworks. The analysis includes a detailed comparison with the EU AI Act, focusing on regulatory sandboxes, sector-specific guidelines, and international alignment. Additionally, the article discusses Taiwan’s administrative guidelines for AI, addressing generative AI, AI in the financial industry, and AI in healthcare. It also examines the current legal framework for consumer protection in Taiwan, outlining challenges and comparing it with the EU’s comprehensive approach. Recommendations for enhancing Taiwan’s AI regulatory strategy are provided, emphasising the need for flexibility, public trust, international collaboration, support for SMEs, robust data governance, ethical AI development, and continuous investment in R&D. The conclusion highlights Taiwan’s proactive approach to AI governance and its potential to set a different standard for responsible AI regulation.