Tech & Sourcing @ Morgan Lewis

In this blog post we explore build-operate-transfer (BOT) models in relation to businesses setting up offshore delivery centers, commonly becoming known as Global Capability Centers (GCCs).

Starting January 17, 2025, financial entities based in the European Union must have in place processes and policies, as well as mandatory contract provisions with their third-party technology vendors, that comply with the EU’s Digital Operational Resilience Act (DORA). Financial entities are currently at varying stages of updating their operational risk management frameworks and remediating contracts with technology vendors. For banks, the European Central Bank has signaled that resiliency will be a top priority on its supervisory agenda.

A significant number of legacy software solutions are now incorporating generative artificial intelligence (GenAI), and most new software solutions have some form of GenAI capabilities. This is true across the majority of, if not all, industries and, as such, it is not surprising that we are seeing a large increase in GenAI-related queries from businesses that use, or are procuring, software.

In part one, we discussed key considerations for the possible inclusion of commercial contract provisions affording a party with excusal/relief from liability for nonperformance of an obligation that it otherwise would have been required to perform under the agreement (relief provision).

Commercial contract provisions affording a party with an excuse from performance can take varying shapes and sizes, but they all serve the purpose of relieving the party from liability for nonperformance of an obligation that it otherwise would have been required to perform under the agreement.

As part of our Technology Marathon webinar series, partners Kristin Lee, Mike Pierides, and Steven Stone recently discussed financial regulators’ increasing focus on artificial intelligence (AI).

Worldwide IT spending is forecast to total more than $5 trillion in 2024, with 10% year-on-year growth of spending on data center systems, according to recent analysis from Gartner. The increasing adoption of artificial intelligence (AI) solutions is driving demand for technology infrastructure in order to meet greater data storage and network infrastructure requirements and more compute-intensive workloads.

Beginning January 17, 2025, the European Union’s Digital Operational Resilience Act (DORA) will require financial entities to maintain and submit to EU regulators a comprehensive register of their contractual arrangements with third-party information and communication technology (ICT) service providers. Financial entities are being given the opportunity to sign up for a voluntary reporting exercise by May 31, 2024, running between July and August 2024, to help them prepare for one of the most challenging aspects of implementing DORA.

We recently published a report based on our four-part series on Tech & Sourcing @ Morgan Lewis, in which we consider a number of conundrums facing companies looking to leverage artificial intelligence (AI) as part of their outsourcing arrangements. As outsourcing remains a key tool through which companies can streamline operations, cut costs, and access specialized expertise, the explosive advancements in AI and related technologies have introduced new and exciting opportunities and complexities for companies in implementing and maintaining outsourcing relationships.

The UK Competition and Markets Authority (CMA) recently published an update paper outlining its concerns with artificial intelligence (AI) foundation models (FMs). Market players in this space should remain mindful of the CMA’s growing interest as the regulator continues its dedicated program to consider the impact of FMs on markets throughout 2024, with a further update anticipated in August.