AI-Centered IPOs Will Face New Legal and Regulatory Challenges

Article
Bloomberg Law

Olshan corporate partner Ari Edelman authored an article in Bloomberg Law (subscription required) entitled “AI-Centered IPOs Will Face New Legal and Regulatory Challenges.” In the article, Ari discusses how companies whose growth is tied to generative artificial intelligence (AI) will need to navigate a rapidly shifting regulatory and legal landscape. He explains that the development of stricter data privacy laws may impact these AI-centered companies. “For example,” Ari writes, “the California Consumer Privacy Act and the Virginia Consumer Data Protection Act impose restrictions on the disclosure of data collected from residents in those states that have the right to opt out of certain sales or transfers of personal information. Connecticut, Utah, and Colorado have enacted similar legislation that took effect last year. As a result, the risk of legal claims in the event of a security breach is increasing and regulators are keeping a watchful eye.” Companies that use AI markup language may face additional danger due to this shifting regularly environment. These firms must therefore ensure that the AI-generated content they produce remains in compliance with existing intellectual property rights. “IPO-ready, AI-centric companies are no strangers to adversity and have confronted a challenging legal and regulatory environment for years. Now that these companies are going public, we will witness the next stage of their evolution and see how the legal advisers of these companies guide their clients,” Ari writes. “Their success as public companies may hinge on how well they adapt to a rapidly shifting legal landscape.”

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