Information Technology 2026

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 technology 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, lawmakers, 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 introducing the EU Data Act, which for the time being at least remains the primary comprehensive legal framework for the development and deployment of AI solutions. 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 convulsions in the technology sector, with investment into companies associated with AI solutions and underpinning technologies reaching unprecedented levels, and creating chains of interlinked transactions between chip manufacturers, data centre operators and software 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 customers, 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 development 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 with such corporate behemoths becomes more limited, the role of legal advisers alters accordingly, ie, away from a concentration upon the negotiation and drafting of specific contract provisions, and towards advice on regulatory compliance, operational resilience and risk mitigation. Regulators in the financial services sector have been especially active in this regard, such that lawyers advising on projects involving the financial services world need to be regulatory specialists in addition to their day jobs, at least insofar as such regulations mandate particular contractual approaches or forms of drafting.

On a perhaps less positive note, the spectre of cyber assaults and incidents continues to loom large, exacerbated now not just by lone wolves and criminal syndicates, but also state actors with access to far more computer resources than ever before. Increasingly for large and small organisations alike, it feels less like “whether” a cyber attack will eventually penetrate through the corporate defences, but “when” (and with what impact). In the UK, the multi-month downtime experienced by Jaguar Land Rover provided a sober reality check for the potential impact upon not just an individual company, but also the wider commercial ecosystem they participate in. Customers again need to consider how their contracts should be set up to address such incidents, whilst suppliers need to assess whether traditional forms of drafting are still applicable (for example, how realistic is it to provide hard and fast Recovery Time Objective figures when it is known that the customer will want to take more time to bring its operations back up?).

In the online world, the past few months have seen increased scrutiny on social media and the control and/or regulation of content. Australia is providing an ongoing experiment in terms of the banning of social media access for adolescents, and it remains to be seen whether other countries will follow suit. In the meantime, there is a continued focus on what the key social media giants could or should be doing to regulate the content on their platforms, and newly emerging litigation risks associated with the perceived addictive effect of certain online offerings (said by some to be the beginning of a new wave of litigation to be akin to the “Big Tobacco” litigation of past years).

Amongst all of the above, there is the spectre of continued geopolitical instability and apparent shifts away from globalisation. These shifts can and are impacting upon technology lawyers and the advice we provide in a myriad set of ways, whether in terms of trying to predict the potential impact of sanctions or tariffs, through to considering the impact of supply chain disruptions and the potential invocation of force majeure or “material adverse change” style contract provisions. For all of the disruption caused by the conflict in the Gulf, for example, one shudders to think what the global impact of conflict around Taiwan would be, given their global share of semiconductor chip production.

So... to use the old Chinese proverb, “we live in interesting times”, with change coming from multiple directions and market forces seeming to shift on a day-to-day basis, there has never been a time when it has been more important to keep up to date with the latest legal developments and thinking, and for lawyers to position themselves accordingly as the trusted advisers to their clients as they seek to chart their own course through these uncertain times. Whether your own view of the tech-driven future is utopian or dystopian (or somewhere in between), this multi-jurisdictional guide should help serve to point the way forward.