Tech & Sourcing @ Morgan Lewis

Throughout this AI & Outsourcing Services series, we have explored how artificial intelligence is transforming the outsourcing industry, reshaping contract terms, creating new forms of vendor dependency, and redefining how value is measured and priced. As organizations increasingly deploy AI-enabled technologies within outsourced environments, another critical issue is emerging: governance.

The fourth blog in our AI and Outsourcing series examines another significant consequence of AI-enabled outsourcing: the fundamental shift in how parties define, measure, and price value. As artificial intelligence (AI) becomes embedded in service delivery, traditional pricing models based on labor inputs, headcount, and transaction volumes are increasingly being challenged. Customers and service providers alike are reevaluating how outsourcing arrangements should be structured when automation and AI-driven efficiencies can dramatically alter the economics of service delivery.

Most services agreements for vendor-provided technology services contain standard provisions allowing vendors to use customer data and data generated through the provision of services to improve and enhance service offerings. Vendors are increasingly seeking express rights to use such data to not only improve their services but also train their AI models. While these provisions seem to be a natural extension of traditional service-improvement rights, they can have significantly broader implications. Before agreeing to such language, organizations should carefully evaluate how customer data will be used, the extent of the rights being granted, and whether the potential benefits outweigh the risks.

As artificial intelligence (AI) becomes increasingly embedded in outsourced services, companies are facing a new and growing challenge: digital dependency on their vendors. Modern outsourcing relationships are no longer limited to staffing support or standardized technology platforms.

In the first post in our AI & Outsourcing series, we observed how artificial intelligence (AI) is transforming the outsourcing industry in ways that extend far beyond operational efficiency. This second post in the series discusses the need to rethink legal and commercial terms that govern outsourcing relationships, as companies increasingly incorporate AI-enabled tools and automation into outsourced services.

Digital transformation initiatives across Europe, the Middle East, and the United States are accelerating at a remarkable pace. As multinational companies expand cloud adoption, AI deployment, data-sharing ecosystems, and managed technology services across jurisdictions, technology transactions are increasingly becoming instruments of geopolitical strategy, regulatory compliance, and regional market access—not simply procurement exercises.

Welcome to the first blog in our AI and Outsourcing series, where we explore the disruptive and transformative impact of artificial intelligence (AI) on outsourcing and managed services transactions.

Join partner Ben Klaber and of counsels Ariel Seeley and Eric Pennesi on Thursday, April 9, 2026 from 12:00 to 1:00 pm ET for a discussion on innovations and trends in digital health. Topics will include artificial intelligence and connected devices, as well as data governance and regulatory developments.

We are currently witnessing a fundamental shift in the role that AI plays in enterprise operations, transitioning from a system that responds when prompted to one that plans, decides, and acts on its own. This shift has a name: agentic AI. And for business leaders and counsel advising on technology strategy, it deserves serious attention right now.

Two years ago, many technology agreements addressed artificial intelligence (AI), if at all, through a generic disclaimer or a brief acknowledgment that AI features might be included in the offering. Today, that approach is inadequate. The integration of AI into commercial products, outsourcing arrangements, and enterprise software agreements has forced a rethinking of longstanding contract frameworks.