Contracts

Connecticut's legislature passed the Artificial Intelligence Responsibility and Transparency Act on May 11, 2026, with Governor Ned Lamont expected to sign it into law. The bill imposes new compliance obligations on employers using automated decision tools in recruiting, hiring, promotion, discipline, and termination. Key requirements include disclosure to affected employees, bias testing, human oversight mechanisms, and documentation of anti-discrimination safeguards. The Connecticut Attorney General will enforce the statute. Vendors and platform developers face information-sharing duties tied to their clients' compliance obligations.

Palantir CEO Alex Karp has publicly attacked low-quality AI outputs as "slop," positioning the company's AI Platform (AIP) as a secure, enterprise-grade alternative built on its Foundry data infrastructure. The criticism comes as Palantir faces investor concerns that it may lose market share to cheaper, faster standalone large language models from OpenAI and Anthropic—competitors that don't require Palantir's ontology-based data backbone.

Greg Brockman's personal diary emerged this week as central evidence in Elon Musk's lawsuit against OpenAI, with the co-founder and president testifying about his internal deliberations over converting the organization from nonprofit to for-profit status. The diary directly addresses Musk's core claim that OpenAI deceived him by abandoning its original mission to develop artificial intelligence for humanity's benefit. Testimony also revealed inflammatory communications: text messages in which Musk threatened to make Brockman and CEO Sam Altman "the most hated men in America" if no settlement was reached, and a 2017 meeting where Musk tore a painting from the wall after cofounders rejected his demand for majority equity.

Elon Musk's lawsuit against OpenAI reached trial this week, with Musk testifying that Sam Altman and Greg Brockman breached their founding agreement by transforming the organization from a nonprofit AI safety lab into a commercial venture. Musk claims he co-founded and funded OpenAI with the explicit understanding it would develop artificial intelligence for humanity's benefit, not profit. The case hinges on internal communications—emails, texts, and executive notes from 2017 onward—that will determine when Musk knew about the company's structural shift toward commercialization and Microsoft's multibillion-dollar investment.

Organizations across all sectors are facing a wave of litigation over their data practices and AI systems. According to a Baker Donelson report, these legal challenges now extend well beyond technology companies and data brokers to affect organizations of every size that rely on data for operations, network security, regulatory compliance, and contractual obligations. The disputes involve civil liberties groups, workers' advocates, and privacy organizations pursuing claims centered on data privacy violations, algorithmic bias, unauthorized data use, AI system liability, and worker surveillance.

Anthropic's CFO Krishna Rao is managing an unprecedented scaling challenge. In early 2026, CEO Dario Amodei disclosed that the company's growth trajectory had exploded far beyond projections—Anthropic is on track to expand roughly 80 times in a single year, compared to the originally planned 10–15 times. This surge has forced the company to renegotiate major cloud and infrastructure agreements with AWS and other hyperscalers while simultaneously managing service outages and capacity constraints.

Lawyers deploying AI agents into client work and business operations face a critical gap in liability allocation: existing professional-conduct rules do not clearly assign responsibility when autonomous systems act with minimal human oversight. An Above the Law analysis argues that contract drafters, risk managers, and counsel must now assess the degree of control an organization actually maintains over an AI agent's permissions, decision-making, and supervision before assigning liability to the organization, the user, the vendor, or another party.

Major AI software vendors are abandoning per-seat licensing in favor of consumption-based pricing tied to work output. Salesforce now charges for "agentic work units," while Workday bills based on "units of work" completed. OpenAI CEO Sam Altman has signaled the industry will shift toward "selling tokens"—the computational units underlying AI processing—positioning artificial intelligence as a utility priced like electricity or water.