INTRODUCTION Contributed by: Kit Burden, DLA Piper LLP
Overview of the Information Technology Sector and Relevant Legislation in 2026 There has probably never been a time which has been more turbulent for lawyers involved with the technol - ogy sector. The primary driver for this is – of course – the remorseless advance of artificial intelligence (AI) solutions. As both the capabilities and applications of AI continue to advance at breakneck pace, law - makers, regulators and contract negotiators inevitably struggle to keep up. From a regulatory perspective, the EU has of course sought to adopt the earlier high ground, much as they did with the previous “wave” in relation to personal data (by way of the introduction of the GDPR), in intro - ducing the EU Data Act, which for the time being at least remains the primary comprehensive legal frame - work for the development and deployment of AI solu - tions. However, the fact that the EU Data Act was so long in gestation (and went through so many changes prior to being finalised) shows the challenges that regulators and lawmakers face in trying to create a framework to address the perceived risks associated with AI, whilst simultaneously not stifling innovation. It remains to be seen whether the rest of the world will follow the line suggested by the EU, or will instead follow a different course (either in terms of adopting more sectorial approaches, or even by adopting more laissez-faire, industry-led regimes). After all, we do not yet even have a common global view as to whether AI- generated outputs are capable of protection by way of the creation of associated intellectual property rights. In the meantime, however, contract negotiators will need to chart their own paths in terms of the contract terms which they believe to be appropriate for the specific circumstances in which AI technologies are to be developed or deployed, and in that sense we can fairly say that market standards are very much in flux/ in the course of development (which in itself creates additional opportunities for lawyers to add genuine value to the commercial discussions of their clients and to help shape appropriate market outcomes). Will we, for example, see contracts mirror the principles of the EU AI Act, and require up-front commitments as to transparency/explainability and the lack of unintended bias or discrimination, or will this be left for case-by- case negotiation?
In the meantime, AI continues to cause wider convul - sions in the technology sector, with investment into companies associated with AI solutions and underpin - ning technologies reaching unprecedented levels, and creating chains of interlinked transactions between chip manufacturers, data centre operators and soft - ware licensors involving sums which are quite literally mind-boggling. It remains to be seen whether there is an element of a “bubble” in this regard that may burst at some point (with significant ramifications thereafter for the wider sector and indeed the global economy), but for the time being, at least, the engine continues to spin at ever increasing speeds. Traditional technology service providers also face particular challenges in this regard; with Agentic AI promising to remove carbon labour (ie, real people) from the service delivery model, the labour arbitrage- based model for offshoring of IT-related services comes under real pressure; we see, therefore, a rush from the tech service provider community to acquire smaller cloud and AI companies in the interests of developing end-to-end “solutions” for their custom - ers, but it remains to be seen whether the combination of AI and cloud technologies will augment their service offerings, or substantially replace them. The ripple effect of the AI revolution then extends into the drafting of technology contracts; what, for example, should be the right balance of risk to be undertaken by the parties in relation to the develop - ment and deployment of AI solutions, and especially those which are themselves dependent upon third- party large language models? What warranties would be appropriately expected from service providers? What kinds of limitations of liability should there be (ie, left to be dealt with as part of the “normal” liability cap or subsumed within a separate “super cap”)? If in the case of the latter, should that be in addition to any such cap for personal data claims, or as part of the same liability pot? It will be interesting to see whether a consistent global position will emerge from these discussions, or whether regional variations will develop. Beyond the world of AI, technology services continue to consolidate around the major SaaS providers and hyperscalers. As the scope of contract negotiation
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