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.

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.

Dr. Sultan Almasoud, managing partner of Morgan Lewis’s Riyadh office, has been closely involved in the Kingdom of Saudi Arabia’s rapid evolution into a global hub for innovation. His insights on the questions below shed light on the trends reshaping technology and esports—and the opportunities they unlock for investors and operators entering the market.

The UAE and Saudi Arabia have rapidly transformed into two of the most dynamic technology markets in the world. Driven by ambitious national strategies—Dubai’s digital-first initiatives and Saudi Arabia’s Vision 2030—both countries are positioning themselves as regional leaders in artificial intelligence, cybersecurity, fintech, cloud computing, and smart infrastructure. Despite extraordinary public-sector investment and momentum, the path to sustained innovation and commercialization is shaped by a mix of high-value opportunities and structural challenges.

Morgan Lewis’s technology, outsourcing, and commercial contract team, along with Boston Consulting Group, recently hosted a roundtable dinner in London, during which senior stakeholders from technology suppliers and large businesses discussed how the rapid evolution of artificial intelligence (AI) is impacting offshoring and outsourcing.

The European Supervisory Authorities (ESAs) published on November 18, 2025 a list of 19 critical information and communications technology (ICT) third-party providers (CTPP) that will be subject to direct oversight under the EU Digital Operational Resilience Act (DORA). The list includes hyperscale cloud providers, data center providers, infrastructure and network providers, and providers of financial services-specific technology.