AI Agreements Poised for Litigation Surge in Next 2-3 Years, Warns Tech Law Expert

A prominent voice in technology law and policy, Tim Hwang, predicts a significant increase in contract litigation within the next 24 to 36 months, particularly stemming from complex and potentially misunderstood agreements in the rapidly evolving tech sector. Hwang, who serves as General Counsel at Abridge, a leader in generative AI for clinical documentation, stated on social media, > "It will take awhile for the problems in these agreements to surface, but a coming wave of litigation in about 24-36 months seems effectively priced in as the parties discover what it is they have signed." He further characterized this period as a "golden era of contract litigation."

Hwang's forecast is rooted in his extensive background at the intersection of AI, law, and public policy, including previous roles at Google and as director of the Harvard-MIT Ethics and Governance of AI Initiative. His concerns highlight a growing unease regarding the intricate nature of modern technology contracts, especially those involving artificial intelligence. These agreements often feature broad data usage rights, limited vendor liability, and complex compliance clauses that may not be fully transparent to all parties.

The anticipated surge in legal disputes is expected to arise from several key areas. Intellectual property rights are a major flashpoint, with ongoing lawsuits concerning the unauthorized use of data for AI model training and questions surrounding the ownership of AI-generated content. Additionally, issues like algorithmic bias, where AI systems may produce discriminatory or flawed outcomes, and "AI washing"—companies overstating their AI capabilities—are increasingly leading to legal challenges and public scrutiny.

Legal experts and industry observers concur that the integration of AI is reshaping the litigation landscape. Traditionally, many technology disputes were resolved through arbitration, but there is a discernible shift towards more public court cases. This move is driven by the need for transparency, the establishment of legal precedents for novel AI-related issues, and the desire for broader societal debate on the ethical implications of AI.

The evolving nature of AI contracts and the potential for unforeseen consequences underscore a critical period for businesses and legal professionals. Companies are urged to meticulously review their AI-related agreements, understand the inherent risks, and prepare for a legal environment where the fine print of technological partnerships will increasingly come under judicial examination. This trend points to a future where robust legal frameworks and clear contractual terms will be paramount for navigating the complexities of AI adoption.