While the regulatory landscape around artificial intelligence (AI) continues to evolve, navigating contractual arrangements and apportioning risk for the use of AI may seem like stepping into the unknown. In this blog post, we consider how a few familiar concepts within commercial contracts may be applied to the provision and use of AI tools as part of services.
Tech & Sourcing @ Morgan Lewis
TECHNOLOGY TRANSACTIONS, OUTSOURCING, AND COMMERCIAL CONTRACTS NEWS FOR LAWYERS AND SOURCING PROFESSIONALS
A recently released Business Process Outsourcing (BPO) Market report indicates significant continued growth in the BPO sector over the next decade. The results of the study on which the report is based show an expected growth from the 2022 market of $245.9 billion to $544.8 billion in 2032, an 8.5% compound annual growth rate (CAGR).
As noted in our recent blog posts, The Rise of Next-Gen Business Process Outsourcing and Key Contracting Issues to Consider, the core premise of next-gen business process outsourcing (BPO) includes (1) the leveraging of automation, bots, performance tools, and other technology to transform and optimize workflows and business processes and (2) the implementation of solutions to collect and analyze data to improve user experiences and business outcomes. Next-gen BPO drives the development and implementation of transformative technology and the generation of critical business data. As such, the identification of key intellectual property (IP) and the allocation of IP use and ownership rights invariably becomes a gating issue in contract structuring and negotiations.
Our recent blog post, The Rise of Next-Gen Business Process Outsourcing, highlighted the importance of understanding the exciting opportunities and the challenges of next-gen business process outsourcing (BPO) in order to effectively negotiate contract provisions that maximize the benefits of next-gen BPO and minimize the risks. In this blog, we take a look at a few key issues to consider when developing and negotiating a next-gen BPO contract.
Business process outsourcing (BPO) transactions are on the rise, with bullish forecasts from industry analysts including a projected revenue annual growth rate (CAGR 2023–2027) for the global BPO market of 6.48%, reaching a market volume of $450 billion by 2027 and global revenue exceeding $500 billion by 2030, and the North American market alone projected to achieve 8.9% CAGR 2023–2030.
The recent rise in popularity of generative AI–powered applications such as ChatGPT poses important copyright issues for individuals and businesses with respect to content creation, including the scope of rights with respect to commercial use, content publication, potential liability for infringement, and content enforcement.
The UK government published its first National Quantum Strategy (the Strategy) on March 15, setting out £2.5 billion (over $3 billion) in funding quantum research and naming a quantum computing industry as a strategic priority for the United Kingdom. The following day, the science and technology committee of the UK House of Commons (the Committee) announced a new inquiry on turning quantum technologies into commercial products. As quantum-focused startups proliferate, UK policymakers are demonstrating their intent to enable early-mover advantages in the sector.
The UK government published a white paper on March 29 setting out a “pro-innovation” UK regulatory framework for artificial intelligence (AI). The framework centers upon five cross-sectoral principles, of which implementation will be context-specific to the use of AI, rather than the technology itself. The government does not propose introducing a new regulator or any new legal requirements on businesses, instead leveraging existing powers of UK regulators and their domain-specific expertise.
OpenAI has introduced its artificial intelligence (AI) language model, ChatGPT, to the world. ChatGPT interacts with users in a conversational manner to create human-like text in response to prompts. The use cases of this potentially disruptive technology appear to be limitless as it has the ability to generate text on a wide variety of topics, including contract drafting. Naturally, lawyers and nonlawyers alike are considering whether ChatGPT is useful as a contract drafting tool.
ChatGPT and subsequent artificial intelligence (AI) programs have been in the headlines recently. Not as common is the discussion of the cost associated with developing and operating such AI tools or if such AI is right for every job.