A Technology With Immense Potential
But Wide-Ranging Legal Ramifications
Artificial intelligence (AI) is a technology with immense potential to change our world and every area of our daily lives. From employee use for business automation and consumer-focused generative AI tools to self-driving cars and even AI lawyering, AI is poised to be one of the most innovative technologies of our lives. The technology is so powerful that countries are jockeying to be leaders in AI, and AI CEOs are calling for security and plans to foster the technology safely.
However, with such great potential inevitably comes global regulatory scrutiny and the subsequent development of legal frameworks that companies need to comply with, ranging from the European Union’s recently passed AI Act to laws emerging in the United States. In the United States, Utah’s recent AI law, Colorado’s, and a “flurry” of AI laws are coming out of California, as well as an “AI working group” in the Senate. Countries, such as the United States and the United Kingdom, are partnering to further efforts at understanding and guarding against emerging AI risks. There are also various ethical questions relating to artificial intelligence and liability ramifications, as well as unknowns about how existing intellectual property law corresponds to this new paradigm and how AI should be viewed in privacy law frameworks such as the European Union’s GDPR.
Since AI is a nascent and rapidly evolving technology with increased capability developing swiftly, novel legal questions are arising in tandem, such as significant questions on the privacy law front, including those concerning AI and location data, as well as comparing varying approaches to how data is processed in the AI context among different AI vendors and associated data processing agreement requirements. There is an additional focus on what is deemed as “higher risk” or “sensitive” uses of artificial intelligence, such as in the context of bias in recruiting, employment monitoring, and healthcare.
Opaque terms and conditions or privacy policies that leave open questions about how AI features interact with online terms that do not account for such functionality are increasingly common pain points, as was illustrated by the blowback that Adobe received concerning their vague terms. Even for non-AI offerings, there are legal considerations concerning AI to account for, such as in the M&A context. These are only a few of the numerous legal ramifications of AI, which will continue to evolve and expand, though there are certain essential AI legal considerations that should be accounted for as a foundational matter.
Regardless, regulators and lawmakers are putting an increasing focus on implementing legal frameworks for AI. The Federal Trade Commission (FTC) is particularly active in regulating and enforcing AI, including as it relates to “deceptive or unfair conduct” under Section 5 of the FTC Act. Further, private actions, including class actions and other multi-district litigation (MDL), are proliferating in the artificial intelligence space, and many of the leading voices see an imminent surge of AI-related litigation. As things currently stand, AI tools and operations need to go through an AI assessment to flag risk and associated compliance obligations. In turn, corresponding mitigation needs to be implemented.
At RICHT, we are AI lawyers focused on working with clients to shape the artificial intelligence space and stay ahead of the regulatory curve and AI policy more generally. Whether it is privacy compliance and intellectual property considerations, and in particular copyright law, for the development of a large language model (LLM) or drafting and negotiating vendor agreements with large LLM providers such as Amazon’s AWS Bedrock AI offering or Microsoft’s Azure AI to limit training on data, which is a particular point of contention, and provide for adequate indemnification, among other legal considerations, we are here to help empower clients to leverage AI for continued innovation while accounting for legal risk.
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80%
Of Enterprises Will Have Incorporated AI By 2026 (Gartner)
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