Impact of EU Laws and Regulations on the Adoption of Artificial Intelligence in Cyber–Physical Systems: A Review of Regulatory Barriers, Technological Challenges, and Cross-Sector Implications

Artificial intelligence is increasingly embedded in cyber–physical systems that coordinate sensing, computation, communication, and control across critical and semi-critical physical environments. Within the European Union, however, its adoption is shaped not only by technological maturity and economic value, but also by an increasingly dense regulatory landscape governing data processing, cybersecurity, product security, accountability, traceability, interoperability, and safety-relevant deployment. A PRISMA ScR-informed scoping review is used to examine how European Union regulation influences artificial intelligence adoption across four representative domains: energy and smart grids, smart buildings, mobility and transport systems, and industrial and manufacturing environments. The analysis draws on primary legal sources, the peer-reviewed literature, and policy and standards-related materials, and is structured around three dimensions: regulatory barriers, technological and architectural challenges, and cross-sector implications for governance, innovation, and competitiveness. The results show that regulation functions simultaneously as a constraint and an enabling condition. It increases compliance burden, raises integration complexity, and slows deployment in higher risk settings, while promoting trustworthy artificial intelligence, stronger cybersecurity, lifecycle governance, clearer accountability, and more interoperable digital infrastructures. The central finding is that regulation is not external to artificial intelligence adoption in cyber–physical systems, but actively shapes the design space within which such systems can be developed, integrated, validated, and scaled. Future progress therefore depends on regulation-aware systems engineering, stronger implementation guidance, and cross-sector reference architectures capable of aligning legal compliance with technical architecture and operational value creation.