The digital revolution facilitates innovation models that generate new markets and business models. Together with Internet, it has opened up a vast array of new possibilities. Latest reappearance of the artificial intelligence has created further potentials and types of market participation. Artificial intelligence is understood as a cutting-edge technology and a key-driver of transition of our economy into digital economy. The expansion and use of artificial intelligence will have a positive impact on many diverse sectors, such as healthcare, farming, security, climate, etc. Potential risks should not be underestimated as well. The pervasive recognition of the advantages of artificial intelligence will depend on legal certainty. The European Union is well aware of it. The main dilemma is to regulate or not to regulate. Too much regulation could stifle innovation and possible new incentives. On the other hand, certain minimum rules are necessary. The most important question is, should the current legal system be adapted to address the new challenges associated with the application of artificial intelligence, and how? Besides developing a proper legal framework, it is necessary to ensure appropriate ethical framework to enhance the trust of consumer, as well as to improve business outcomes. Certain rules already exist, but none of them regulate artificial intelligence specifically. The article questions a premise whether it is suitable to develop one legislative instrument, or whether it would be better to leave it to the sector regulations. The main idea behind it is that new technologies are moving too fast and the regulation is lagging behind. Certain regulation is needed, but with the caveat that any framework must be able to respond to new developments. The first challenge is to opt for a proper definition in order to be able to propose possible solution. The article will address those issues and offer potential answers. It will conclude that certain rules are definitely needed in order to preserve the fundamental values and standards.