Data Is (Almost) Everything

Since the dawn of the digital world, data has been seen as a vital resource. Something to collect and analyze. Something to store and protect. Something to buy, sell, and trade. And yes — for the world’s countless cybercriminals — something to steal, manipulate, and exploit.

Today, data’s economic value is as great as it’s ever been. Businesses across the globe depend on it to develop and refine products and services, to attract and retain customers, to guide policy, to mitigate risk, and so much more.

All else equal, quality data can give companies a long-term competitive edge — if they know how to use it, and do so within the law.

In this edition of Vantage Point, we highlight three areas where data is at the forefront of conversation: AI, privacy, and security.

From Cloud to Compliance: Legal Essentials for Building and Operating AI-Ready Data Centers

Intensifying demand for AI-ready cloud infrastructure has sparked extraordinary growth in the global data-center construction market, and all signs are that the growth will continue. Now valued at more than $250 billion, the market is projected to double in size in less than a decade, reaching nearly half a trillion dollars by 2034.

A wide range of companies are racing to develop and operate data centers that can handle the workloads of today’s AI era. Yet doing so is a highly complex process with many moving parts. It requires careful planning and execution, and numerous questions can arise.

Should companies seeking to develop an AI-ready data center build it from scratch, lease physical space in an existing facility, or license servers or cloud space from a third party?

Where will companies get power and chips? Who will they work with to procure, implement, and maintain servers and software? How best can they navigate regulatory compliance, and draft and negotiate the many associated commercial agreements?

Our Technology Transactions team examines these questions and more — and explains how the pieces fit together.

Texas AG Targets Allstate in First Enforcement of Texas Data Privacy and Security Act

Last summer, Texas adopted the Texas Data Privacy and Security Act, joining the growing list of states with comprehensive data privacy legislation on the books. Now, Texas Attorney General Ken Paxton is showing that the Lone Star State means business, filing the first enforcement action under the Act.

The lawsuit, filed against insurer Allstate and its subsidiary, Arity, alleges that the two companies unlawfully collected, used, and sold geolocation and movement data from Texans’ cellphones.

This landmark action sets a strong precedent for future regulatory scrutiny, and underscores the importance of compliance for companies collecting or processing personal data from Texas residents, including companies based outside the state.

What compliance risks should companies focus on, and how should they aim to mitigate these risks?

Our Data Privacy attorneys share their perspective.

Watch What You Say: SEC Enforcement Scrutinizes Cybersecurity Incident Disclosures

In January, the SEC filed a settled enforcement action against Ashford Inc., a company that provides products and services to the real estate and hospitality industries, for making false and misleading disclosures about a cybersecurity incident that exposed sensitive hotel customer information.

This was among the last cyber-related actions brought under former SEC Chair Gary Gensler and offers some useful cybersecurity-related reminders for companies going forward. Companies should:

• Establish a robust and comprehensive disclosure process that brings all relevant subject matter experts to the table, particularly in a time of crisis.
• Provide shareholders with accurate accounts of material cybersecurity incidents based on complete information.
• Avoid incomplete, inadequate, or rushed investigations of cyber incidents.

The SEC expects companies to conduct thorough and timely investigations of cyber incidents, provide accurate and complete disclosures to shareholders, and, as reflected in the press release announcing the settlement, will reward cooperation with Commission inquiries and requests for information.

Our Cybersecurity team takes a closer look.

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