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Welcome to this week's edition of The Legal Wire!

OpenAI just laid down $6.4 billion for Jony Ive’s stealth startup io, betting that fresh, non-touchscreen hardware will be the next platform to supercharge ChatGPT subscriptions, and reduce its dependence on Apple. Legal tech isn’t sitting still either. Fresh off an $80 million Series B, Legora is racing to scale its AI collaboration suite, already used by 250 firms across 20 markets. Investors now peg the company’s value at $675 million. But enthusiasm meets a harsh reality: a Varonis audit of 1,000 corporate IT environments found that 99 percent leave sensitive data exposed to shadow AI apps, missing MFA, and dormant “ghost” accounts, prime targets for the next big breach.

Into this mix comes a new flashpoint on Capitol Hill. A House GOP budget rider would freeze all state-level AI regulation for the next decade, overruling newly minted safety laws in states like Tennessee and California. Backers say the moratorium would prevent a messy patchwork and spur U.S. leadership; critics call it a blank check for deepfakes and biased algorithms.

To help you track these fast-moving rules, whether they stall or surge, we’re rolling out the Legal Wire AI Regulation Tracker. Check the AI Regulation tracker below!

This week’s Highlights:

• Industry News and Updates

• The Legal Wire Launches AI Regulation Tracker

• AI Regulation Updates

• AI Tools to Supercharge your producivity

• Legal prompt of the week

• Latest AI Incidents & Legal Tech Map

➡️ GOP Bill Would Block State AI Laws for 10 Years | A Republican budget proposal would ban U.S. States from regulating AI for the next decade, drawing backlash from consumer advocates and lawmakers. Critics say it would halt protections against deepfakes, biased algorithms, and harmful chatbots, leaving consumers exposed until Congress acts — which it hasn’t. Supporters argue the moratorium would prevent a patchwork of state laws and boost U.S. AI leadership. But 77 advocacy groups warn it gives tech companies “no rules, no accountability, and total control.” States like Tennessee and California have already begun passing targeted AI safety laws.
^{May 25, 2025, Source: Mashable}

➡️ OpenAI CFO: AI Hardware Will Drive ChatGPT Growth | OpenAI CFO Sarah Friar says the $6.4B acquisition of Jony Ive’s startup io is a bet on the future of AI hardware, and will help grow ChatGPT subscriptions. While io has no product yet, Friar told CNBC the deal is about “betting on great people” and building the next computing platform. She hinted at new, non-touchscreen devices and said OpenAI will continue working with Apple, but wants to “spark innovation broadly” with its own hardware.
^{May 22, 2025, Source: CNBC}

➡️ Legora Raises $80M to Accelerate Legal AI Adoption | Legal AI platform Legora has secured $80 million in Series B funding, bringing its valuation to $675 million. Led by ICONIQ and General Catalyst, the round will help Legora expand its collaborative AI tools used by 250 legal teams across 20 markets, including top firms like Cleary Gottlieb, Bird & Bird, and Goodwin. The company recently opened a New York office and plans to scale product development and client partnerships globally.
^{May 21, 2025, Source: The Legal Wire}

➡️ 99% of Companies Expose Sensitive Data to AI, Says Varonis | A new Varonis report finds that 99% of organizations have sensitive data vulnerable to AI tools. Analyzing 1,000 real-world IT environments, the study highlights risks like: Unverified or shadow AI apps, lack multi-factor authentication and inactive "ghost" users. Varonis warns that without stronger data controls, the AI boom could trigger serious breaches.
^{May 20, 2025, Source: GlobeNewswire}

Compliance and regulations

The Legal Wire Launches AI Regulation Tracker

The Legal Wire has launched a new feature: the AI Regulation Tracker, a dedicated system for monitoring the evolving global landscape of artificial intelligence legislation. This tool was built in response to the fragmented, inconsistent, and often inaccessible nature of AI-related legal developments across jurisdictions. As states, regions, and international bodies move to regulate artificial intelligence, the need for a central repository of verified, real-time information has become critical.

The AI Regulation Tracker addresses this by aggregating legal and policy documents from across the globe, classifying them, and presenting the material in a streamlined interface designed for precision and speed. Lawyers, policymakers, corporate risk officers, and compliance teams now have a single reference point for tracking the legal status of AI in any country.

Each entry in the system falls under one of three categories:

• Latest Developments: recent legislative proposals, amendments, regulatory shifts.

• Bilateral and Multilateral Developments: agreements, joint frameworks, or formal cooperation across jurisdictions.

• Official Materials: original bills, strategy papers, consultation documents, and published regulations.

Data is sourced automatically from official government and institutional channels. Each development is condensed into a brief, standardized summary and linked directly to the original source document for verification. No analysis, interpretation, or editorial framing is inserted.

The platform uses a clickable global map interface. Users select a country to view a snapshot of current AI legislation and related activity. Each jurisdiction’s page is continuously updated and timestamped.

Subscribers to The Legal Wire receive weekly updates from the tracker as part of the newsletter, under the AI Regulation Tracker section.

For direct access, users must navigate to the AI Regulation Tracker and select their country of interest.

The most recent developments from the past week:

📋 25 May 2025 | Philippines House of Representatives Speaker calls for global unity to combat AI-powered misinformation, cyber threats: In his address at the 29th Parliamentary Intelligence-Security Forum in Madrid, Philippines House of Representative Speaker Ferdinand Martin G. Romualdez warned about the escalating threats posed by AI being used to spread disinformation, manipulate politics, and undermine democratic institutions, urging urgent global action and legislative cooperation. Speaker Romualdez (1) called for parliaments worldwide to confront cyberattacks, data manipulation, and AI-generated propaganda, emphasizing the need for vigilance and unity among democracies; (2) highlighted the Philippine-led ASEAN resolution promoting responsible AI use and protecting citizens; (3) stressed the importance of lawmakers ensuring technology serves progress rather than division; and (4) advocated for international frameworks to regulate tech platforms, boost information literacy, and strengthen resilience against deepfakes, noting that forums like the PI-SF foster global solidarity and legislative strength to defend freedom in a rapidly changing world.

📋 23 May 2025 | Australian Signal Directorate releases guidance on AI data security: The Australian Signals Directorate (ASD) has released guidance on securing data across the AI lifecycle. The guidance addresses critical risks such as data poisoning, supply chain vulnerabilities, and "data drift" (i.e. changes in the underlying statistical properties of the input data to an operational AI system whereby the input data becomes significantly different from its original state over time). The guidance provides mitigation strategies on data management, data quality testing, and input and output monitoring.

📋 22 May 2025 | House of Representatives passes Budget Reconciliation Bill, which includes a 10 year state-based AI regulation moratorium: The House of Representatives has passed the Budget Reconciliation Bill, which includes a 10-year federal moratorium on the enforcement of state and local laws regulating such technologies. The Bill now goes to the Senate for consideration.

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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:

⚠️ 2025-05-15 | FBI Reports Ongoing Vishing and Smishing Campaign Allegedly Targeting Government Officials Using Purportedly AI-Generated Voices | View Incident

⚠️ 2025-05-19 | New Orleans Police Reportedly Used Real-Time Facial Recognition Alerts Supplied by Project NOLA Despite Local Ordinance | View Incident

⚠️ 2025-05-15 | Citation Errors in Concord Music v. Anthropic Attributed to Claude AI Use by Defense Counsel | View Incident

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Nevertheless, these Materials are intended solely for general informational purposes and do not constitute legal advice. They may not necessarily reflect the current laws or regulations.

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