The past year may not have given us artificial intelligence (AI), blockchain or the metaverse, but it has given rise to greater appreciation of opportunities and risks brought about by emerging technologies. So, what about 2024?

Let’s start with Collins Dictionary’s word of the year, AI. Although it’s really Cambridge Dictionary’s word, ‘hallucinate’ (referring to the spewing of misinformation by AI systems) that interests me most. It highlights our willingness to ascribe human-like attributes to this technology we now interact with like a good friend.

Now, healthy friendships have boundaries, so I expect we’ll see a shift of favour towards responsible AI next year. There is, after all, a growing appreciation of the need to balance AI’s undeniable potential with its broad and varied risks. As contractual damages, regulatory fines and reputational harm join the myriad risks faced by investors, developers and those deploying AI systems, the era of “move fast and break things” is over. We’ll see a shift towards more virtuous products that go beyond the letter of law to also address ethical principles by design.

Delivering this requires organisations to implement comprehensive internal governance mechanisms, and investors to hold boards accountable. That demands an understanding of what AI systems exist in the business, how they are used and what data they pull from. It necessitates appropriate oversight, processes and controls.

The problem is, as we usher in the new year, very few organisations can honestly say they’ve accomplished this. The reality is, most boards are still getting to grips with the concept of AI, let alone what it means for their business – or their workforce. For this reason, I predict governance issues will become much more acute for organisations in 2024. 

It goes without saying that getting governance wrong can be catastrophic for everyone involved. Think about the impact of the writers’ strikes in Hollywood. They happened, in part, because people feared for their jobs as a result of AI and the lack of governance around its use. This should be a lesson for employers on the lengths workers are prepared to go to if they fear technology existentially threatens their livelihoods. My hope is that employers take heed and dedicate time, money and energy next year to actively engaging with their workforce on emerging technologies.

But governance is just one area that businesses must address when it comes to advanced technologies. What of AI’s broader interplay with ESG, for example? Some countries noted at a recent United Nations’ session that AI could help achieve the UN’s Sustainable Development Goals, but might equally damage environmental sustainability and disrupt societies if deployed irresponsibly.

With a growing body of ESG regulation impacting businesses around the world, next year will see more attention given to the challenges of water and energy usage by AI systems and data centres, as seen with blockchain’s proof of work systems in recent years. And it’s that encroachment of regulation from every direction that leads to my next prediction: the legal and regulatory landscape surrounding emerging tech will become vastly more complex to manage in 2024.

While it’s possible to find common themes across emerging policy and regulation – for example, the need for safe, secure and trustworthy systems – the fact is, policymakers globally are diverging. You need only to compare China, the EU, the UK and the US to see quite how different approaches and even definitions are becoming. Keeping pace is already a challenge for organisations, and that will only get harder as time passes.

Now, that’s not to say technology regulation is necessarily bad. Regulation is central to delivering business and consumer confidence that drives innovation. That’s why we see crypto firms looking favourably on Europe – with its Markets in Cryptoassets Regulation (MiCA) – and the UK as regions to do business, as they face an increasingly uncertain regulatory climate in the US.

Which takes me to my next prediction: we’ll see more regulatory-compliant crypto infrastructure and platforms coming to market in 2024. Europe and the UK bringing crypto firms and activities within scope of regulation that aligns closely with traditional investment services regulation places them on a level playing field with financial institutions for the first time, creating new opportunities for products, services and collaborations – my bet being that tokenisation and decentralised finance (De-Fi) take centre stage.

Though I do think that innovation will spill into the metaverse, as well. With manufacturers turning up the competitive dial, headsets are finally becoming more wearable and capable. So, my final prediction is that we’ll see more people donning VR headsets and engaging with mixed reality content next year. Consumer attitudes will shift as we glimpse the internet of the future. But as our worlds merge, expect to see more legal incidents in both our physical and digital realms – from trespass and personal injury to data privacy and online harm. 

Alexander Amato-Cravero leads Herbert Smith Freehills’ emerging technology group in the UK, US and EMEA.