AI regulation set to cause 30% rise in legal disputes by 2028

Gartner predicts that artificial intelligence regulatory breaches will drive a 30% rise in legal disputes for technology companies by 2028.

The forecast follows a survey of 360 IT leaders engaged in the rollout of generative AI (GenAI) tools, which found that more than 70% ranked regulatory compliance among their organisation's top three challenges for GenAI deployment. Only 23% of respondents expressed strong confidence in their organisation's ability to manage the security and governance aspects associated with integrating GenAI into enterprise applications.

Regulatory compliance concerns

Lydia Clougherty Jones, Senior Director Analyst at Gartner, commented on the diverse regulatory landscape surrounding AI:

"Global AI regulations vary widely, reflecting each country's assessment of its appropriate alignment of AI leadership, innovation and agility with risk mitigation priorities," said Lydia Clougherty Jones. "This leads to inconsistent and often incoherent compliance obligations, complicating alignment of AI investment with demonstrable and repeatable enterprise value and possibly opening enterprises up to other liabilities."

The survey also identified ongoing challenges related to global politics. Fifty-seven percent of non-US IT leaders reported that the geopolitical climate had at least a moderate impact on their GenAI strategies and deployments, with around 19% describing the impact as significant. Despite these challenges, nearly 60% indicated they were either unable or unwilling to adopt GenAI tool alternatives developed outside the United States.

AI sovereignty's growing role

Further data from a Gartner webinar poll of 489 respondents shed light on the rising importance of AI sovereignty-defined as a nation's ability to control the development, deployment, and governance of AI within its jurisdiction. Forty percent of those surveyed said their organisation views AI sovereignty positively, seeing both hope and opportunity, while 36% said their organisation was neutral about the issue, describing their stance as a "wait and see" approach.

The poll also highlighted that 66% of organisations were proactive or engaged in responses to sovereign AI strategies, and over half (52%) said their organisation was already making strategic or operational changes based on sovereign AI considerations.

Response measures and recommendations

Against a background of uncertainty in legal and political frameworks for GenAI, Gartner recommends a number of steps for IT leaders to enhance the moderation and safety of GenAI outputs, particularly as concerns about regulatory and security challenges persist.

Gartner suggests engineering GenAI models to self-correct or decline to respond to certain queries, for example by using phrases such as "beyond the scope". Organisations are encouraged to implement rigorous review procedures for different use cases, assessing risks associated with output from chatbots, and to use control testing benchmarks that align with the organisation's risk tolerance.

In terms of model testing, Gartner advocates for assembling cross-disciplinary teams-including decision engineers, data scientists and legal counsel-to devise pre-testing protocols, validate model outputs, and document actions to mitigate undesired themes in training and output data. The inclusion of content moderation tools such as "report abuse" buttons and warning labels for AI-generated content is also encouraged.

Market implications

The findings underscore how emerging and rapidly evolving AI regulations are placing increased pressure on technology companies to adjust their AI development and deployment strategies, with many making significant changes to their operating models. The survey results point to an environment where confidence in handling regulatory, security, and governance challenges remains limited among IT leaders as the adoption of GenAI tools becomes more widespread.

These survey insights and recommendations provide organisations with benchmarks for comparing their preparedness and approaches to managing AI in a complex and shifting global context.