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Platforms met prosecutors, and the facts got sharper. Brussels widened its DSA case against X to probe Grok’s role in generating sexualised deepfakes, a reminder that safety-by-design is now a compliance test. In the U.S., law school applications jumped even as loan caps and AI uncertainty complicate the return-on-degree math. Across the UK economy, firms reported productivity gains from AI alongside net job losses, with pressure landing hardest on early-career roles. And in courtrooms, the center of gravity keeps shifting toward evidence of provenance: expect copyright to be the main brake on model training where datasets can’t pass the “lawfully obtained” test.

The through-line for legal teams: regulators are moving from principles to penalties; talent pipelines are swelling under tighter financing; and AI’s efficiency gains are real, but so are the labour shocks.

Our feature: Navys, an OS for LP transfers that replaces the spreadsheet scrum with actual infrastructure.

➡️ EU Opens Probe Into X Over Grok’s Sexualised Deepfake Images | The EC has opened an investigation into X over Grok’s ability to generate sexualised deepfake images of women and minors, expanding an existing Digital Services Act (DSA) case against the platform. EU officials said the probe will assess if X adequately mitigated risks tied to illegal content, including manipulated sexually explicit images that could amount to child sexual abuse material. This follows mounting scrutiny across jurisdictions and comes after the EU fined X €120 million in December for DSA transparency violations.
^{Jan 26, 2026, Source: Yahoo Finance}

➡️ Law School Applications Surge, Even as AI and Loan Caps Raise Stakes | U.S. law school applications for the 2026 cycle are up an estimated 17% year-over-year and roughly 44% compared with two years ago, driven in part by people viewing a J.D. as a stable career hedge amid economic uncertainty. But the payoff is less predictable than past cycles: tuition has climbed sharply, and new federal lending limits taking effect in July will cap borrowing for professional degrees, potentially forcing more students toward costlier private loans. At the same time, generative AI adds uncertainty around long-term demand for junior legal work, even as near-term employment outcomes for recent graduates remain strong.
^{Jan 25, 2026, Source: New York Times}

➡️ UK Seeing Net AI-Driven Job Losses Despite Productivity Gains | Morgan Stanley research suggests UK companies are cutting more jobs than they create due to AI, reporting an 8% net decline in roles over the past year, the steepest impact among major economies surveyed. The study found UK firms also reported an average 11.5% productivity boost from AI, but job growth has lagged amid wider hiring pressures. The report indicates early-career roles are most at risk, particularly in white-collar sectors such as finance, law, consulting, and creative services.
^{Jan 26, 2025, Source: The Guardian}

➡️ Copyright May Become the Main Legal Check on AI Under Trump’s Executive Order | Under Trump’s national AI framework, this piece argues copyright will become the main legal pressure point for AI developers, with courts focusing less on AI outputs and more on whether training data was lawfully sourced. It highlights Bartz v. Anthropic as a warning that fair use may protect training on legitimately obtained works, but collapses when datasets include pirated “shadow library” material—creating massive statutory damages exposure. The takeaway: provable data provenance and licensing are increasingly the safest path.
^{Jan 23, 2025, Source: Bloomberg Law}

The LP transfer process has long been the paperwork-stuffed junk drawer of fund operations: essential, ignored, and increasingly messy. Ask any fund lawyer or admin professional and they’ll tell you the same thing: the legal work isn’t the problem, it’s everything around it. Emails fly around. Spreadsheets multiply. Signatures hide in plain sight. Now imagine all of that, but…cleaned up. That’s what Navys is building.

Founded by Amr Jomaa, a former funds lawyer at Kirkland & Ellis and Cleary Gottlieb, Navys is a legal technology player that’s rethinking the operating system for funds, starting with a notoriously painful workflow: LP transfers. The platform centralizes every step of the transfer from initial outreach to final closing, into one structured, secure workspace. It’s not a flashy add-on or a chatbot bolted onto legal work. Navys offers real infrastructure.

This week, The Legal Wire sat down with Navys’ founder Amr, to understand how the platform emerged from the trenches of fund formation work and what it might signal about where legal tech is headed next.

Click here to continue reading the full interview

The AI Regulation Tracker offers a clickable global map that gives you instant snapshots of how each country is handling AI laws, along with the most recent policy developments.

The most recent developments from the past week:

📋 24 January 2026 | Singapore to invest more than S$1 billion in national AI research plan over 5 years: It is reported that Singapore plans to invest over S$1 billion in its National AI Research and Development Plan (NAIRD) from 2025 to 2030, aiming to enhance public artificial intelligence research capabilities. Announced by Minister for Digital Development and Information Josephine Teo at the Singapore AI Research Week 2026 gala dinner, this initiative supports the updated National AI Strategy (NAIS) 2.0. The plan focuses on fundamental AI research, applied AI research, and talent development, including establishing AI research centers of excellence and nurturing "bilingual research talents" proficient in both AI and domain expertise.

📋 24 January 2026 | China issues new rules classifying online content harmful to minors: Kazakhstan's government plans to introduce an AI-powered assistant to aid in developing regulatory legal acts. This system will analyze international legal practices, monitor developments, and ensure draft laws comply with the Constitution, as announced by Vice Minister of Justice Bekbolat Moldabekov. This initiative is part of a broader digitalization agenda, which includes an automated legal advisor on the adilet.zan.kz portal and the Digital Bailiff program that automates enforcement proceedings. The forthcoming AI assistant aims to enhance the quality, coherence, and legal stability of legislation by providing expert support during the drafting process.

📋 23 January 2026 | MCMC lifts temporary restriction on access to Grok application on X platform: The Malaysian Communications and Multimedia Commission (MCMC) has lifted the temporary restriction on access to the Grok application on the X platform, after X implemented additional preventive and safety measures. The MCMC met with X representatives to review compliance with Malaysian law and the implementation of safeguards. The MCMC will continue to monitor Grok to ensure ongoing compliance. Any future violations of Malaysian law will be addressed according to applicable regulations.

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Why it helps: It turns a few shorthand notes into a partner-ready strategy memo with authorities, dates, and next steps. Saving drafting time, aligning the team, and accelerating decisions.

The Responsible AI Collaborative is a not‑for‑profit organization working to present real‑world AI harms through its Artificial Intelligence Incident Database.

View the latest reported incidents below:

⚠️ 2026-01-14 | ICE AI Resume Screening Error Allegedly Routed Inexperienced Recruits Into Inadequate Training Pathways | View Incident

⚠️ 2025-12-01 | Purported Deepfake Nude Images of Students Circulated Without Consent at Valencia Educational Institute | View Incident

⚠️ 2025-12-09 | Purported AI-Generated Image Falsely Depicting JD Vance and Usha Vance in Public Altercation Circulated on Social Media | View Incident

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