For two years, the legal technology conversation has turned on a single premise, that artificial intelligence can read a contract. It can.

In due diligence, where the review of hundreds or thousands of agreements once set the cost and the calendar, a well-pointed model now does in an afternoon what a team of associates needed two weeks to finish. The most labor-intensive phase of diligence has become, for practical purposes, nearly free.

The temptation is to treat that as the whole victory. In my experience it is not. Compressing the middle of a process does not eliminate the work that surrounds it. It moves that work to the two ends, and those ends are where legal AI is least useful. Cross-border technology M&A makes the point as well as any practice I know.

A Process That Resembles a Software Build

It helps to look at diligence the way an engineer looks at building software. Software moves through three phases, architecture, engineering and deployment. Due diligence moves through three of its own, scoping, issue identification and remediation. In both, the middle phase was historically the constraint. Engineering consumed the calendar, and issue identification consumed the associates who read every contract and flagged every clause.

Coding assistants compressed the first of those phases. Legal AI is compressing the second. The consequence is the same in each case. When the middle of a process is no longer the bottleneck, the work that determines the outcome shifts to the front and the back. Engineers spend their judgment on architecture and deployment. Diligence lawyers should spend theirs on scoping, which decides what to examine, and on remediation, which decides what the findings mean. Those phases turn on judgment rather than volume, and judgment is the thing the model does not provide.

The Familiar Problem of Garbage In, Garbage Out

A fast engine will carry out a poor instruction faithfully. Point legal AI at a loosely scoped review and it returns 500 findings, of which perhaps 50 bear on the transaction. The fee a team thought it had saved comes back as the labor of sorting the pile, and a deal-defining issue can sit in that pile receiving the same brief attention as the boilerplate around it.

This is the part of the story that tends to go unmentioned. The model surfaces everything, which means a person still has to decide what everything means. A tool that makes identification cheap raises the value of the scoping that comes before it and the remediation that follows. It does not lower it.

Where the Judgment Lives, In Practice

The point is clearest in the diligence of a modern software company, which is global whether or not anyone planned it that way. Code is written wherever the engineers live. Intellectual property is created across jurisdictions. A target with modest revenue can carry employees, data, and tax exposure in a dozen countries without a single foreign office. The central scoping question becomes geographic. Which jurisdictions deserve real scrutiny, and which do not.

That question rests on a distinction a model will not draw reliably on its own, the difference between a few foreign employees and a genuine foreign operating footprint. A handful of remote engineers in three countries presents real but bounded risk, usually handled with focused local employment advice. Running a full review in each of those countries spends money to disprove a risk that was never material. A company that genuinely operates abroad is a different matter, and two questions reward careful attention. The first is whether the company owns its intellectual property at all. Many jurisdictions, unlike the United States, do not vest an employee’s work product in the employer by default, and if the chain of title fails under local law, the buyer may not own the asset it is paying for. The second is tax. The assumption that a structuring review has answered the tax question can obscure whether a dispersed workforce has created a taxable presence in a country where nothing was ever filed.

A model can flag an assignment clause. It will not tell you that the clause is unenforceable under Portuguese law, or that the missing clause for a contractor in Bangalore is the one that matters. Recognizing that is scoping and remediation, the work at the two ends, and it remains human.

The Discipline the Tools Require

The lesson reaches past M&A, and it is the one worth carrying into any workflow that AI now touches. An accelerated middle pays off only when the ends are handled with discipline. In diligence that means scoping tightly enough that the machine looks in the right places, and remediating carefully enough to separate the exposures that threaten a deal from the ones that only look alarming on a printout. It also means scoping for the parties who rely on the work after signing. The representations and warranties insurer decides what it needs to see before it will cover a risk, and it penalizes too little diligence and too much in equal measure. The lenders have their own requirements for guarantees, share pledges, and audited financial statements, and those requirements surface at financing rather than at signing unless counsel has anticipated them.

Legal AI can read every document in a data room faster than any team a firm could assemble. It cannot tell a buyer which jurisdiction holds a real operation and which holds a single laptop, and it cannot tell the buyer what the deal’s eventual insurers and lenders will require. That judgment is the work the technology has made more valuable rather than less. The firms that see this will use AI to clear the middle and put the time it frees back into judgment at the ends. The firms that treat a faster review as a finished one will reach the wrong answer sooner than before.

Reprinted with permission from the June 4, 2026 edition of the Legaltech news ©2026 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.

On May 18, 2026, a jury in the Central District of California convicted Dr. Violetta Mailyan of orchestrating to defraud Medicare through fraudulent Botox injection claims. While the fraud itself was bold enough, what makes this case a bellwether is how the government caught her.

The Department of Justice’s (DOJ) Health Care Fraud Section’s Data Analytics Team flagged Mailyan after its analysis showed she collected more Medicare payments for Botox injections than any other doctor in the country. At trial, prosecutors drove the point home with a peer comparison exhibit — a graph showing Mailyan as an extreme statistical outlier who raked in more than $24 million over four years, which was six times more than the next highest group of providers. The visual is striking, intuitive, and devastating. It reduced a complex fraud scheme to a single, irrefutable data point: this doctor is not like others:

The Mailyan case is not an isolated success story. It is the most recent illustration of a fundamental shift in how the federal government detects and prosecutes health care fraud — a shift from reactive investigation to proactive, data-driven identification of fraudulent actors.

The Rise of the Data Analytics Team

The DOJ’s Health Care Fraud Unit’s Data Analytics Team was established to enhance the Unit’s ability to detect, investigate, and prosecute complex health care fraud schemes. Since its founding, the team has grown in both capacity and ambition. According to the DOJ’s 2025 Year in Review, the Data Analytics Team completed 2,085 data requests and 164 proactive data referrals in 2025 alone — referrals that aided charging decisions, resolution of significant matters, and asset seizures.[1]

The term “proactive referral” is the key phrase. Traditional health care fraud enforcement has long followed a “pay and chase” model — the government pays claims, receives a tip or complaint, investigates after the fact, and then attempts to recover funds that have often already been dissipated. Proactive data referrals work to invert this paradigm. The Data Analytics Team identifies statistical anomalies, billing outliers, and suspicious patterns in claims data before a complaint is filed and, in some cases, before the money even goes out the door.

The Mailyan case is a textbook example. Nobody filed a whistleblower complaint. No disgruntled employee called a tip line. The data itself raised the alarm.

What This Means for Health Care Providers

The practical implications for health care providers are significant. The DOJ is no longer primarily dependent on whistleblowers, patient complaints, or traditional investigative leads to initiate cases. The government is actively mining Medicare and Medicaid claims data to identify outliers — and it is doing so continuously.

The Mailyan trial exhibit, a peer comparison graph showing the defendant multiple standard deviations from her peers, is a preview of what juries will see in future cases. It is simple, visual, and powerful. A provider who is a dramatic statistical outlier will face the immediate inference that something is wrong, and the burden of explaining away that data will fall squarely on the defense.

For compliance purposes, providers should assume that their billing data is being analyzed and compared against their peers at all times. Internal compliance programs should incorporate the same types of analytics the government is using — peer comparisons, outlier detection, and trend analysis — to identify and remediate potential issues before the government comes calling. As the DOJ’s enforcement record makes clear, it is far better to be the one who finds the anomaly first.

Conclusion

The conviction of Dr. Mailyan is a milestone not because of the fraud itself but because of what it represents about the future of health care fraud enforcement. The government found this case not through a tip, not through a whistleblower, but through data. And it proved the case at trial not primarily through cooperators or paper trails, but through a graph showing that the defendant’s billing was so far from the norm as to be inexplicable by any legitimate practice.

As the DOJ continues to invest in its Data Analytics Team and AI-powered detection capabilities, providers should expect that the era of “pay and chase” is giving way to an era of “detect and prevent”. The peer comparison chart in the Mailyan trial may prove to be one of the most consequential trial exhibits in recent health care fraud enforcement — not for what it showed about one doctor but for what it signals about how the government intends to find and prosecute the next one.

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On May 27, 2026, the Assistant Attorney General in charge of the Department of Justice’s (DOJ) Civil Division, Brett Shumate, that civil lawyers within the DOJ and U.S. Attorney’s Offices will need to fast-track and prioritize sealed False Claims Act (FCA) qui tam cases involving fraud against federally funded state administered benefits programs. According to the DOJ’s announcement, the Civil Division intends to evaluate these sealed matters within 60 days where possible, and no later than 120 days, pursuant to a March 2026 executive-order-driven enforcement initiative. This directive will require the DOJ’s civil lawyers to issue subpoenas, review records, and conduct interviews in an unusually compressed timetable.

This development has immediate consequences for recipients of Civil Investigative Demands (CIDs). For these state-based benefit matters, this directive will require companies and other entities that receive CIDs for documents, interrogatory responses, or testimony to mobilize quickly, preserve relevant information immediately, and make early strategic decisions about response scope and privilege. Extended deadline continuances may become harder to obtain if the DOJ is operating under internal review clocks tied to sealed-case decision points.

This accelerated decision schedule will necessarily shift the burden of litigation to relators and their lawyers requiring them to handle the resulting litigation with a minimal burden on the government. That reality makes the pre-intervention phase more consequential: presentations to the DOJ during the CID and seal period may now have an even greater impact on whether the government intervenes, narrows its theories, or declines the case altogether.

The DOJ’s leadership emphasized in the memorandum that a “whole-of-government” approach would apply: the DOJ will coordinate quickly with criminal prosecutors, fraud enforcement units, and affected agencies to evaluate criminal, civil, and administrative remedies, including payment suspensions and program-specific analysis. Overall, the goal is to accelerate meritorious benefits fraud cases and focus government resources on the most serious and complex schemes.

It will be essential for companies and individuals who receive these CIDs to retain counsel and start collecting the responsive records immediately upon receipt.

Practical Implications for Providers, Contractors, and Managed-Care Participants

Organizations participating in Medicaid, Medi-Cal and other state-administered benefit programs should expect faster information demands and less tolerance for slow internal collection efforts once a CID or related inquiry arrives. Entities that rely on decentralized claims, eligibility, utilization-management, pharmacy, or subcontractor data may face greater challenges because the government’s timeline will not pause while records are gathered across business units.

Three practical implications stand out:

• Preservation and collection must begin immediately. Legal, compliance, and business teams should identify custodians, systems, and third-party data sources at the outset rather than waiting for rolling negotiations over scope.
• Early case assessment becomes more important. Counsel should quickly test the factual theory, reimbursement pathway, damages assumptions, and any materiality arguments before the DOJ reaches an intervention decision.
• Parallel-enforcement planning should occur on day one. Because the DOJ has signaled closer coordination across enforcement channels, responses should account for potential criminal, administrative, suspension, and overpayment ramifications at the same time.

Given the importance of FCA matters to the healthcare industry, in-house counsel at such organizations should be extra attentive when CIDs arrive regarding Medicaid and Medi-Cal in light of these new, compressed deadlines. 

In , Vice Chancellor Laster considered fiduciary-duty challenges to a dilutive cramdown financing, including claims against an alleged non-majority controller and members of the board. Ruling on a motion to dismiss, the court dismissed the claims against the alleged controller, but allowed certain claims against directors to proceed.

Although the transaction is the kind of financing that now sits squarely within the territory of the 2025 amendments to Section 144 of the Delaware General Corporation Law (“Section 144”), those amendments did not apply because the case was already pending on February 17, 2025.

Even so, the decision offers several insights into how courts may think about the amended statute — especially in the context of controller status, special committee design, and coercive “pay-to-play” structures.

The Facts

In November 2020, three investment funds, Cleveland Avenue, LLC (“Cleveland”), Olympus Growth Fund VII, L.P. (“Olympus”) and Movendo Capital B.V. (“Movendo”) (collectively, the “Funds”) invested approximately $150 million in the Class A stock of Footprint International Holdco, Inc. (the “Company”).ĚýIn January 2023, facing a liquidity crisis following a failed merger, the Company obtained approximately $70 million in bridge loans from Cleveland, an affiliate of Cleveland’s founder and CEO, and Movendo, convertible into a new series of Class F stock.Ěý

In February 2023, the Board formed a special committee (the “Committee”) to consider financing proposals from investors affiliated with Board members.ĚýThe Committee had only the power to make recommendations to the Board but could not veto financing proposals.

On March 17, 2023, the Committee recommended proceeding with the Funds’ proposal for an investment of up to $500 million in Class F stock.ĚýThe Committee and the Board declined to pursue competing financing proposals: an offer from Shuler Capital for 80% of the Company at a $670 million valuation, and an oral offer from Apollo Global Management at a $1 billion valuation.

The Board approved the Class F financing in April 2023. It involved the Funds’ receiving new Class F Stock, and the exchange of their existing Class A shares for a new Class A-1 shares that converted into 1.71x more common stock.ĚýTo neutralize blocking rights, the Company used financing proceeds to redeem some Class B shares held by one holder (ZenCap, for $10 million), and proposed redeeming some Class D shares from another holder (the Koch family, for $35 million).ĚýWhen the Company’s lenders refused to consent to the Class D redemption, Cleveland stepped in to purchase those shares, and in return received a change in the conversion ratio for an IPO that was nearly 27 times more favorable.

The financing valued the Company at $500 million pre-money — half the valuation used in bridge loans just months before.ĚýThe Funds took $450 million of the round; the remaining $50 million was offered to other stockholders in a compressed three-week timeline, with limited diligence permitted only after commitment. The term sheet showed that, in a $1.2 billion exit, subscribing stockholders would be made whole but non-subscribing Class A stockholders would recover just 4% of their original investment.Ěý

Some of the Company’s early investors sued, alleging breaches of fiduciary duties by Cleveland as a controlling stockholder, and by the individual directors. 

The Decision

Controlling Stockholder

The court first considered whether Cleveland, a 26.4% blockholder, was a controlling stockholder.ĚýBecause the amendments to Section 144 did not apply, the court engaged in a lengthy analysis of a number of factors that the plaintiffs alleged evidenced control, drawing from two of Vice Chancellor Laster’s recent articles (the “Historical Articles”).ĚýThe court held that block size was the strongest factor evidencing control, but the allegations did not support a showing of control.

The court identified two competing schools of thought: formalistic and functional.ĚýThe “formalistic” school focuses on direct control over the board by virtue of voting power or ownership, as opposed to influence over the business affairs of the corporation, discounting influence outside of stock ownership, and requiring a high level of voting power to support a showing of control. In contrast, the “functional” approach looks at control over the corporation’s business affairs, considers multiple sources of influence, and recognizes lower levels of voting power as supporting control. Without expressly endorsing either school, the Guilbeau court’s analysis tracked a functional approach.

As to block size, the court held that 26.4% would support at least a presumption of control under most statutory regimes — singling out the Section 144 amendments as an exception. The court noted that, with typical ~80% meeting attendance, a 26.4% block needs only 27% of unaffiliated shares to carry a vote.ĚýIt reviewed a century of case law and commentary treating 25% blocks as carrying “substantial influence,” with several early cases finding control below 30% or even 20%. Nonetheless, the court held that any presumption of control was outweighed by other factors: other large blockholders, a governance agreement fixing board composition and the absence of any allegation of coordinated group action.

Other factors likewise fell short: Cleveland had only one board designee out of ten and no alleged ties to other directors. The complaint’s allegations of commercial influence (key customer/supplier relations) also were too generalized to support control. 

Director Fiduciary Duties

The court assessed whether the complaint adequately alleged that a majority of the board was independent and disinterested — a prerequisite in this case for avoiding entire-fairness review.Ěý Of the 10 directors, the court found that four directors (Fund and ZenCap affiliates) were “dual fiduciaries” with inherent conflicts, and found that for four others (including the three Committee members), the complaint failed to adequately allege they were conflicted.

Of the other two directors, one (Chung) was the Company’s Chief Technology Officer.ĚýThe court held that, when there is a controlling stockholder, or the board has an interested majority, at the pleading stage an officer-director is generally treated as non-independent, given the risks to continued employment from voting against the controller or interested majority.ĚýThe court held that, given five of the ten directors were conflicted, entire fairness would apply for the motion to dismiss.

Entire Fairness

The court made light work of finding that entire fairness was adequately pleaded. The large valuation gap between the Class F financing and other contemporaneous transactions, including the bridge financings and the Apollo proposal, indicated financial unfairness. The lack of disclosure in the term sheet sent to stockholders about the depressed valuation, the arrangements with the Series B investor and the Series D investor, the third-party proposals, and various nonrateable benefits received by the Funds indicated procedural unfairness.

The court held that the fact that stockholders were offered the opportunity to participate in the $50 million unallocated portion of the financing did not defeat the entire-fairness claim. While an opportunity to participate can be evidence of fair dealing, in other situations, the court reasoned that “a pay-to-lay structure can be actionably coercive and inferably unfair.” A coercive structure that forces stockholders into a favored structure is not the same as simply offering stockholders a choice. “[C]oercion exists when a fiduciary has taken action that causes its beneficiaries to act — whether by voting or making an investment decision like tendering shares — for some reason other than the merits of the proposed transaction.”ĚýThe court held that the Class F financing was coercive because non-participating stockholders could not maintain the status quo. Moreover, the Class F financing was not made equally available to all stockholders.ĚýThe Funds took 90%, and the remaining 10% was offered to other investors under time pressure before they had an opportunity to conduct diligence.

Lessons Regarding The Section 144 Safe Harbor

The decision, when considered together with the Historical Articles it draws from, provides useful guidance on how the Section 144 amendments might be interpreted, particularly by Vice-Chancellor Laster.

• The One-Third Floor. Section 144(e)(2)(c) includes in the definition of “controlling stockholder” a minimum ownership or control of one-third in voting power (the “One-Third Floor”).ĚýThere has been debate in the legal community as to whether this is merely a threshold for getting into the safe harbor, or alternatively it means a stockholder that falls under the One-Third Floor cannot be deemed a controlling stockholderĚýfor fiduciary duty and potentially other purposes.ĚýThere is language in Guilbeau, such as a reference to Section 144(e)(2)(c) “establish[ing] a hard one-third floor below which control is precluded by statute,” that suggests the latter interpretation is the correct one.

• The Control Test Above the One-Third Floor. Above one-third ownership, the test for whether a stockholder is a controlling stockholder has changed. It is a version of the narrow formalistic test, not the multi-faceted functional test.
• Special Committee Role in Non-Controller Transactions.ĚýThe amendments to Section 144 attracted attention for relaxing the entire-fairness test in transactions involving a controlling stockholder.ĚýBut the amendments also significantly affect transactions without a controlling stockholder where a majority of the board is conflicted.
  • Before the amendments, that scenario was dealt with under entire fairness — a multi-faceted test of fair price and fair process (as applied in Guilbeau). If both elements pointed away from fairness, the board needed a robust special committee that replicated arm’s-length bargaining and had the power “to say no” — i.e., the board had to delegate negotiating and veto authority to the transactionĚýcommittee. An advisory committee (such as the one in Guilbeau) was treated as ineffectual.ĚýBut handing over this level of control to the board members who are often the least deal-savvy and, by definition, the least vested in the deal is often disfavored by practitioners.
  • The safe harbor under amended Section 144 is more straightforward.ĚýThe special committee need only satisfy the criteria under Section 144(a), and there is no requirement that the board delegate negotiating and veto authority to the committee (unlike under Section 144(b) involving controlling stockholders).ĚýThe committee can act in parallel to the board rather than replacing it. The advisory committee in Guilbeau, consisting of disinterested directors, would not be dismissed out of hand as ineffectual.Ěý
  • All that is required, besides the directors being disinterested, is that they (i) are informed of all material facts, and (ii) act in good faith without gross negligence.
  • Boards should ensure they have at least two independent directors who can serve on such a committee. Per Guilbeau, they should assume an employee-director will not qualify.
  • The less fact-intensive analysis under the safe harbor seem likely to make claims easier to dismiss at the motion to dismiss stage.

• Opportunity to Participate. A common approach in venture is to try to sanitize a deal that favors some preferred holders, such as a cramdown financing, by making it available to all stockholders. In many cases, that approach will be ineffectual.

In celebration of Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Heritage Month, Â鶹´«Ă˝ & Lardner hosted a firmwide virtual program on May 28 featuring . He is the Chief Justice Earl Warren Professor of Constitutional Law at NYU School of Law and the Director of the Meltzer Center for Diversity, Inclusion, and Belonging.

The theme of the program was “What’s at Stake at the Supreme Court This Term” and featured Yoshino’s insightful analysis of recent and anticipated decisions in cases about voting rights, birthright citizenship, the power to impose tariffs, and other hot topics before the Court.

He explained how each of these cases arrived at the Supreme Court, the key legal and constitutional issues they address, how the justices ruled, and the anticipated impact of those decisions now and in the future. He also offered a few of his insights on the evolving legal landscape of workplace diversity, equity, and inclusion before turning to some of the issues that the Court may weigh in on next term.

“The major questions and non-delegation doctrines are spaces to watch for the future,” he said, because it directly implicates how much authority Congress can hand over to the executive branch.”

Yoshino’s insights offered timely perspective on the legal and practical questions organizations are facing today, while also underscoring the importance of thoughtful, informed engagement with inclusion in a changing world.

This AANHPI Heritage Month program is part of an ongoing Â鶹´«Ă˝ series that acknowledges the various cultural and heritage months by featuring an accomplished member of the diaspora.

Follow the link to learn more about Diversity, Equity, & Inclusion at the firm.

Key Legal Insights from Â鶹´«Ă˝â€™s Automotive Team

Analysis by Julie Dautermann, Competitive Intelligence Analyst

Â鶹´«Ă˝ is here to help you through all aspects of rethinking your long-term business strategies, investments, partnerships, and technology. Contact the authors, your Â鶹´«Ă˝ relationship partner, or our Automotive Team to discuss and learn more. 

KEY DEVELOPMENTS

• Â鶹´«Ă˝ & Lardner announced the launch of its 2026 AI in Manufacturing & Supply Chain Series, a new initiative to help industry participants identify and manage the legal risks and business strategies arising from the profound shifts and innovations reshaping manufacturing and supply chain operations. The most recent article in the series is Legal Considerations for IP in Smart Manufacturing: Data Ownership, Trade Secret Risks, and Patenting AI-Assisted Inventions. Subscribe to get updates about new articles in this series.

• Â鶹´«Ă˝ & Lardner partners Nicholas Ellis and Vanessa Miller were featured in Supply & Demand Chain Executive for their article, .
• U.S. new light-vehicle sales are projected to reach a SAAR of 16.3 million units in May, representing an increase of 5.8% year-over-year, according to a from JD Power and GlobalData. The analysis notes that year-over-year comparisons remain challenging, as May 2025 results were lowered by accelerated purchases in the two preceding months in response to U.S. import tariffs. Total global sales in 2026 are forecast to decline 1.1% YOY to 91.1 million units, due to market challenges that include the ongoing conflict in the Middle East, and weakened sales within China.
• Plante Moran’s 2026 North American Automotive OEM-SupplierĚýWorking Relations Index® (WRI®) Study overall improvements across all six North American OEMs for the first time in the study’s history. Toyota and Honda are in the top two positions, followed by GM, Nissan, Ford, and Stellantis.

• Â鶹´«Ă˝ & Lardner provided an update for multinationals pertaining to new rules for Section 232 tariffs on steel, aluminum, and copper derivatives.
• The Justice Department filed on May 29 announcing a Court of International Trade order that granted all U.S. importers the ability to seek refunds on IEEPA tariffs that were deemed unlawful by the U.S. Supreme Court.

• The U.S. Court of International Trade will not stay its ruling prohibiting the collection of Section 122 10% global tariffs for certain plaintiff importers while the judgment is appealed, according to a report in . This follows a federal appeals court’s on a decision that had found global tariffs imposed by President Trump under Section 122 of the Trade Act were unlawful.

• The Trump administration is to be considering a proposal that would require 50% of the components and materials in an automobile to be produced by U.S. sources in order to qualify for preferential treatment under the United States-Mexico-Canada Agreement. The agreement currently requires 75% of a vehicle’s materials to come from North American sources to avoid certain tariffs and qualify for USMCA preferential treatment.Ěý

• A May 2026 from the National Association of Manufacturers (NAM) called for the swift renewal of the USMCA, while recommendingĚý process improvements in areas that include protecting cross-border investments, securing critical mineral manufacturing inputs, and strengthening certain USMCA provisions to “discipline the behaviors of state-owned enterprises.”

• Over a dozen Democratic U.S. senators the U.S. Trade Representative to prioritize concerns during the USMCA review that include preventing the offshoring of U.S. manufacturing jobs to Mexico, strengthening the enforcement of labor laws in Mexico, and addressing increased Chinese investment in Mexico and Chinese expansion in North American supply chains.

• Automotive analysts how USMCA negotiations may be affected by trade agreements that established certain levels of U.S. import tariffs on vehicles and parts from the European Union, Japan, and South Korea.
• The European Union of its trade deal with the U.S., clearing a significant hurdle ahead of President Trump’s threatened July 4, 2026 deadline to raise tariffs on European automobiles if the agreement is not finalized. The European Parliament and EU countries are expected to vote to ratify the finished text later this month.

• U.S. automakers and dealerships may encounter higher prices and shortages of synthetic motor oils due to resulting from the Iran war, according to the Independent Lubricant Manufacturers Association.

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OEMs/SUPPLIERS  

• A UAW strike at a supplier plant in Michigan could impact pickup truck production for GM, according to a report in .
• Volvo from the U.S. Office of Information and Communications Technology and Services to import and sell cars with connected vehicle technology. A Commerce Department that went into effect on March 17, 2025 of connected vehicles and related hardware and software linked to China with a phased approach beginning with the 2027 model year. Volvo has several production plants in China and it is majority-owned by Zhejiang Geely Holding Group.

• The U.S. auto industry is at risk of becoming less competitive in global markets due to certain that emphasize the domestic market.
• summarized commentary from a number of auto suppliers in support of USMCA renewal.

• GM to move production of the Chevrolet Groove and Aveo away from China joint venture plants to its Ramos Arizpe production site in Mexico beginning in 2027. GM employs more than 23,000 workers across four manufacturing complexes in Mexico.

• ±·´Ç±ą±đ±ôľ±˛ő’ largest aluminum plant is on track to in June, following two fires last fall that have disrupted supplies for certain automakers.
• Stellantis a $70 billion five-year strategic plan that will include the launch of by 2030, as well as in the North American market priced under $40,000.

• One million prospective buyers have avoided purchasing a new vehicle since the start of the decade due to persistently high prices, according to a report in . Automakers are expected to continue pursuing higher profits by selling fewer, more expensive trucks and SUVs.

• A number of European automakers are to be considering options for sharing unused plant capacity with Chinese automakers to reduce costs. Chinese automakers a combined record 10% market share in Europe in April.
• Stellantis intends to of AI-powered digital twins at certain plants in North America this year.

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AUTONOMOUS TECHNOLOGIES AND VEHICLE SOFTWARE

• Waymo a new autonomous vehicle purpose-built specifically for robotaxi use in partnership with ZhejiangĚýGeely Holding subsidiary Zeekr. Public rides will begin in parts of San Francisco, Los Angeles, and Phoenix.
• A recent from Accenture and Germany’s Center of Automotive Management assessed the past and planned launches of software-defined vehicles (SDVs) by select OEMs including Tesla, Toyota, BMW, Mercedes-Benz, Volkswagen, BYD, Geely, and Xpeng.
• Tesla of its full self-driving system – or FSD Supervised – in several countries that include China.
• BYD a 4 nanometer autonomous driving chip at its technology day in China. The automaker plans to invest over $14 billion in intelligent technology R&D over the next three years.
• Mercedes to launch its MB.Drive Assist Pro assisted driving system incertain German cities later this year. This will follow the availability of a limited version on certain CLA models in the U.S., and the 2025 debut on Mercedes models in China. The – which requires driver supervision at all times – was as a more cost-effective replacement to the automaker’s SAE Level 3ĚýDrive Pilot autonomous technology.
• in atypical traffic situations remains an area of focus for a number of robotaxi developers.

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MARKET TRENDS AND REGULATORY

• Certain U.S. refineries are to be prioritizing the production of jet fuel and reducing gasoline output in response to global supply constraints caused by ongoing in the Strait of Hormuz. This may contribute to higher gasoline prices during the peak summer travel period.
• Used-car retailer Carvana is into new-car sales by acquiring certain Stellantis dealerships and selling vehicles online.
• A number of third-party vehicle marketplace sites have revised pricing displays in response to greater from the Federal Trade Commission on dealership advertising practices.
• The , a bipartisan five-year surface transportation reauthorization, includes a to impose annual registration fees on battery electric and plug-in hybrid electric vehicles to support highway funding. The bill introduced by U.S. House lawmakers on May 19 also theĚý Department of Transportation to establish performance-based safety standards for certain automated driving system-equipped commercial motor vehicles operating in interstate commerce.
• The Environmental Protection Agency delaying stricter emissions standards for light- and medium-duty vehicles until model year 2029.

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HYBRID AND Electric Vehicles

• Toyota of a new EV for its Lexus brand due to a broader review of new projects and weak consumer demand.
• Hybrids are a fast-growing vehicle segment in the U.S., having in the last three years to 20% of total U.S. new-vehicle sales.
• Retail sales of passenger new energy vehicles (NEVs) in China year-to-date through mid-May are . The decline was to an increasingly saturated market, reduced subsidies, and weak consumer spending.
• In the , hybrid-electric models were the top choice among European Union consumers, accounting for 38.2% of the total new-vehicle registrations, followed by petrol and diesel cars (30.2%), battery-electric vehicles (19.7%), and plug-in hybrid electric vehicles (9.6%). Chinese brands for 15% of BEV sales in Europe in April.

Notes from the Sidebar Summit at Nasdaq, where the IPO conversation finally stopped being theoretical

Friends,

I spent yesterday afternoon in New York at the Nasdaq MarketSite for the Sidebar Summit, and I moderated a panel on markets, AI, and capital formation. Sidebar Summit was part of a series of events comprising New York Tech Week. I want to share what I took away, because the timing of the day turned out to be almost too good to script.

A few hours before I walked on stage, Anthropic filed a confidential S-1 with the SEC. The company behind Claude. Worth something like nine…hundred,,,billion…dollars. Sixty…five …billion…dollars – raised in a single round the week before. The periods are illiteration to make a point.ĚýThese are giant numbers, and the public statement said almost nothing. No price, no date, no share count. It might go public after the SEC finishes its review, market permitting. That is the whole message.

So I opened with it. I told the room that the most valuable private company most of them have never owned a share of (unless they participated in a pension fund) just started the most expensive game of will-they-won’t-they in history. SpaceX is already on file. OpenAI is reportedly next. Three of the largest offerings ever attempted, all lined up for the same narrow window, and not one of them willing to quote you a price. For the last three years, everyone in a room like that one has told me the IPO market is coming back. It has been coming back the way my flight out of Newark is always about to board. At some point, coming back is just a thing we say to each other.

That set up the real question for the next 45 minutes. Is what happened that morning the window finally opening, or is it three companies big enough to kick the door down because the door stopped working for everybody else? And if it is the second one, what does that tell the thousand companies behind them that cannot force anything?

The panel before us framed the stakes

Our session followed a strong panel led by Rob Gould Protiviti on whether and when to go public, with Bill Barhydt of Abra and Aaron Schumm of Vestwell. Bill and Aaron come at the question from very different businesses, but they landed in the same place I keep landing with clients: going public is no longer a milestone you reach because you are supposed to. It is a financing and liquidity decision you make with eyes open, weighed against staying private, against an M&A exit, against the structured secondaries and continuation vehicles that did not exist when I started doing this. The decision has gotten harder, not easier, and companies only do it when they have to.

What my panel actually argued about

I had told the audience there would be no slides and no prepared remarks, and that my panelists disagree with each other on things that matter. They delivered. I will not pretend every exchange resolved cleanly, because it did not, and that was the point.

The two lines I am still thinking about both came from the stage.

The first was from Mark Gorenberg, chairman of the MIT board of trustees and founder of Zetta Venture Partners. When the conversation threatened to drift into all the reasons it is hard right now, the cost of being public, the asymmetry of private capital, the policy gridlock, Mark cut through it. His message was simple and he delivered it with the conviction of someone who has watched several technology cycles crest and break. It is time to get going. This is the greatest era we have ever been in, and the best time in the history of the world to form a new technology company. I have heard a lot of market commentary in 25 years of doing this work. That one stuck, because it reframes the entire anxiety of the moment. The structural problems in the public markets are real. They are also not a reason to sit on your hands while the most consequential platform shift of our lifetimes plays out.

The second came from Chris Kelly, and it was advice for founders rather than market color. Test out every new idea. In an era where the cost of building has collapsed and the tools to prototype are sitting on every desk, the constraint is no longer capital or even engineering time. The constraint is willingness to try. The companies that win the next decade will be the ones that ran the most experiments, not the ones that waited for certainty that was never coming.

Put those two together and you have the whole thesis of the afternoon. Get going, and try everything.

The fireside that followed, and a client I am proud of

After our panel, Gerald Brady of SVB sat down with Deven Parekh of Insight Partners for a fireside chat, and I will admit I enjoyed it for a slightly self-interested reason. Insight backed our client Mirantis, and I got to brag a little. Mirantis spent more than a decade as a cloud infrastructure company, then executed a genuine pivot into AI, and last month sold to IREN in an all-stock deal valued at roughly $625 million in stock as of signing. IREN is using the acquisition to climb the stack from raw GPU capacity into full AI cloud delivery, and Mirantis brought the orchestration software, the enterprise customer base, and the operational depth to make that credible. It is exactly the kind of outcome this market is supposed to produce and too rarely does: a company that read where the puck was going, made a hard pivot, and found the right home at the right time. The Insight team helped get them there.

Which brings me to the part I could not stop talking about

I came into the day a structural skeptic about the IPO machine, and I left one. Filing is not pricing. A confidential draft starts a clock and commits to nothing. The gap between the three giants tiptoeing toward the public market and the founders sitting in that audience wondering when their own window opens is the gap that policy still has not fixed. And it is worth being honest about why that gap exists, because the answer is not the one most people reach for.

The public market has been shrinking for thirty years. The number of U.S.-listed companies has fallen from roughly 8,000 in the mid-1990s to about 4,000 today. The capital did not vanish. It moved to the private markets, which now sit on something like $8.5 trillion and ask for almost none of the disclosure or accountability the public markets require. A generation of growth has happened in a room most Americans are not allowed to enter. The teacher and the firefighter saving through a 401(k) get to buy in late, after the best gains have already been distributed to a narrow set of insiders. That is the real cost of the shrinking public square.

SEC Chairman Paul Atkins has made reversing the trend the center of his agenda, under the banner “Make IPOs Great Again,” and in a single month this spring, the SEC turned that slogan into actual rulemaking. Semiannual reporting as an option. Shelf registration opened to nearly every company instead of just the giants. A simpler filer framework, relief from the most expensive recurring audit ritual, a multi-year on-ramp for the newly public, and a withdrawal of the climate-disclosure rules a federal court had already paused. I support all of it. Then on May 26, the Chairman went to Stanford and opened a comment file asking for bold and creative ideas to modernize how companies go public. That invitation matters as much as the rules.

But here is the uncomfortable truth, and it is the thing I kept pressing on stage. Companies do not avoid the public markets mainly because reporting is expensive. They avoid them because the private markets now offer everything a growing company needs with none of the friction. You cannot draw companies back by discounting the rent when the alternative is unlimited and unregulated. Lowering the cost of being public is half the job. The other half is removing the barriers that keep companies from going public in the first place, and on that, the work has barely begun.

So when people ask me what I would actually add to the agenda, here is my list.

• Rewrite the gun-jumping rules. The rules governing what a company can say while going public were written in 1933 and last meaningfully touched in 2005. They force a company into silence at the exact moment investors most want to hear from it, and they turn ordinary communication into a minefield only expensive counsel can cross. Rebuild the whole thing around one principle: police fraud, not the act of speaking.
• Revive research and trading for smaller companies. Wall Street has almost no economic reason left to publish research on, or make markets in, anything outside the largest names. You can see the result in the concentration of the market, where seven companies made up roughly a third of the S&P 500 at the end of last year. A company that goes public only to find no analyst covering it and no real market in its shares has little reason to be public at all. Let smaller issuers choose wider trading increments, and support the firms willing to commit capital to make markets in their stock.
• Fix the litigation calculus. A company doing an IPO is exposed to a class of securities suits that seasoned public companies are largely shielded from, and the safe harbor that lets mature companies discuss their projections in good faith does not extend to the companies that need it most. Until honest forecasting is something a newly public company can do without inviting a strike suit, the math will keep pushing companies private.
• Modernize the path to listing. After the Supreme Court’s 2023 decision in Slack Technologies v. Pirani, the heavy registration statement once required for a direct listing adds cost without adding much protection. Streamline it. And rehabilitate, rather than bury, the SPAC and the alternative public offering. Both are legitimate routes to the public market that the current rules treat as second-class.
• Make the giants disclose. There is no good reason a company that has raised a billion dollars or more in private capital should sit outside the public reporting system. The money funding those companies comes from pension funds, endowments, insurers, and the vehicles managing ordinary Americans’ retirement savings, which are exactly the investors the securities laws exist to protect. A company of that size is public in substance. It should disclose like one, on terms fitted to its circumstances rather than copied wholesale from the rules for a Fortune 100 issuer. I will let you decide which company that filed a confidential draft this morning might have something to say about that.
• Welcome the world. America’s share of global IPOs has fallen sharply over two decades. An agenda serious about capital formation cannot treat foreign issuers as an afterthought. We should be competing to list the world’s growing companies here, not narrowing the door.

The takeaway

Put it together and you get the through-line of the whole afternoon. Mark is right that this is the best time in history to build, and that the only unforgivable move is to wait. Chris is right that you test every idea, because the cost of trying has never been lower. And the policy job is to make sure that when those companies are ready, there is a public market worth going to, one that ordinary Americans can actually invest in.

The May agenda is the most serious attempt in a generation to reopen the U.S. public markets, and it deserves broad support. But finishing the job means fixing the rules that keep companies out, not just discounting the rent for the ones already inside. The comment windows close this summer. If you want a deeper, more open public market, this is the moment to say so on the record.

Get going. Test everything. And help us finish the job.

More soon.

Thanks to Vishal Verma and the Sidebar Summit team for producing a great event.

Louis Lehot is a partner at Â鶹´«Ă˝ based in Silicon Valley, where he advises entrepreneurs, investors, and public companies on corporate, securities, capital markets, and M&A matters. He has more than 25 years of experience guiding companies from formation to IPO and beyond.

Opinions are the author’s own and not those of his firm. This is commentary, not legal advice. Attorney advertising. Prior results do not guarantee a similar outcome.

The American Hospital Association (AHA) and the recently the launch of the (Accelerator) at AHA’s Health Research & Educational Trust (HRET), a three-year national initiative designed to help hospitals and health systems operationalize and scale proven technologies across care environments. The initiative is supported by a $12 million commitment from West Health Institute and will focus on three priority areas: electronic health record (EHR) optimization, virtual care, and artificial intelligence (AI) utilization and integration.

The announcement addresses a practical challenge for hospitals and health systems: many organizations are testing or adopting technologies that can improve care delivery, quality, safety, and operational performance, but it can be difficult to move those tools from limited pilots to consistent use across the organization. The Accelerator is intended to help close that gap. Participating hospitals and health systems will have access to a digital hub, implementation support, peer-learning opportunities, and examples from hospitals and health systems serving as national models. In other words, the initiative is focused on helping hospitals make the technologies work in real care delivery settings.

Why This Matters

The AHA/West Health announcement is another sign that AI, virtual care, and EHR optimization are moving out of the “innovation project” category and into the day-to-day operations of health care delivery. That shift matters because once technology is embedded in clinical workflows, staffing models, patient communications, documentation practices, triage pathways, and care management programs, it becomes more than an IT initiative. Implementation can raise practical questions about clinical oversight, medical staff governance, professional responsibility, documentation, reimbursement, and compliance infrastructure.

For hospitals and health systems, the key question is no longer only whether a technology works. It is whether the organization can implement the technology safely, consistently, and in a way that aligns with existing health care regulatory requirements.

The Accelerator’s Three Priority Areas

The Accelerator focuses on three areas that are already priorities for many hospitals, but that can be difficult to implement consistently across an organization: EHR optimization, virtual care, and AI utilization and integration.

EHR Optimization

EHR optimization has become both an operational priority and a compliance issue. Hospitals are looking for ways to reduce administrative burden, improve clinical workflows, support earlier identification of patient risk, and make it easier for care teams to act on the right information at the right time. As EHR workflows become more closely integrated with AI-enabled tools, clinical decision support, documentation functions, virtual care platforms, and care management programs, hospitals should assess whether those workflows continue to support integral functions including accurate documentation, appropriate billing, medical record integrity, and clear clinical accountability. This is especially important when technology changes how information is presented to clinicians, how documentation is generated, or how patient needs are escalated. Even when a tool improves efficiency, the hospital still needs a clear process for determining who is responsible for reviewing the information, acting on it, and documenting the clinical decision-making process.

Virtual Care

The Accelerator’s focus on virtual care also reflects the continued evolution of telehealth from an access tool to a broader care delivery and staffing strategy. For hospitals and health systems, virtual care may include telehealth visits, virtual nursing, centralized care teams, specialist consults, remote monitoring, and hybrid care models. These models can help expand capacity, support staffing flexibility, and improve access, but they also need to be structured carefully. Scaling virtual care requires more than selecting a platform. Hospitals need workflows that are clinically appropriate, operationally sustainable, and compliant across the states and care settings in which patients and clinicians are located.

Artificial Intelligence Utilization and Integration

The Accelerator’s AI focus is notable because it is framed around utilization and integration, not just experimentation. In hospital settings, AI tools may support a range of functions, including clinical workflow support, documentation, risk identification, operational efficiency, and care team coordination. The regulatory analysis depends less on the fact that a tool uses AI and more on how the tool is used, what role it plays in the care delivery process, and who remains responsible for clinical judgment. An AI tool that supports an administrative workflow raises different regulatory issues than a tool that influences clinical decision-making, generates clinical documentation, prioritizes patient outreach, recommends next steps, or communicates information to patients or care teams. Hospitals should classify AI-enabled tools by use case and risk level, then align oversight, documentation, monitoring, and escalation processes accordingly.

From Pilots to Systemwide Practice

A similar implementation challenge applies beyond the Accelerator. For many hospitals, the difficult step is not identifying a promising technology-enabled use case but moving that use case from a limited pilot to a workflow that can operate consistently across the organization.

Many hospitals are already testing or using AI-enabled tools, virtual care models, remote monitoring programs, or EHR-enabled interventions in limited settings. Those pilots can be useful, but broader implementation is different. A pilot may be managed through a narrow protocol, limited users, and close operational oversight. Systemwide implementation requires a more formal framework, including policies, governance, training, escalation pathways, documentation standards, medical staff involvement, billing review, and ongoing monitoring.

A workflow that is appropriate for a small pilot may not be sufficient once the same technology is deployed across multiple service lines, facilities, or patient populations. As hospitals move from pilots to broader implementation, legal and compliance teams should be involved early enough to help design a scalable model, not just review issues after the technology is already in use.

Regulatory Questions Hospitals Should Ask Before Scaling

Hospitals and health systems evaluating AI, virtual care, and EHR-enabled tools should consider several threshold questions before moving from pilot programs to broader implementation. These questions should be addressed early in the implementation process, rather than after the workflow is already live.

1. Who is furnishing the service?

Hospitals should determine whether the technology changes which clinicians or care team members are involved in furnishing the service. For example, a virtual nursing model, centralized monitoring program, or AI-supported triage workflow may involve different personnel than the hospital’s traditional in-person workflow. That can raise questions about licensure, scope of practice, supervision, delegation, credentialing, privileging, and medical staff oversight.

2. Where are the patient and clinician located?

For virtual care models, patient and clinician location remain central regulatory questions. Hospitals should evaluate whether clinicians are appropriately licensed or otherwise authorized to furnish services to patients in the states where the patients are located. This is especially important for centralized or cross-state virtual care models. Hospitals should also consider state-specific virtual care requirements.

3. How is the workflow documented?

Hospitals should confirm that the medical record accurately reflects the care furnished, the individuals involved, the information reviewed, and the clinical decisions made. If technology generates summaries, prompts, alerts, draft notes, risk scores, or recommended actions, hospitals should determine whether and how those outputs are incorporated into the medical record and who is responsible for reviewing them.

4. How is the service billed?

Technology-enabled workflows can affect coding, billing, and reimbursement. Hospitals should evaluate whether the workflow supports the requirements for the service being billed, including any applicable requirements related to clinician involvement, supervision, time, documentation, patient consent, or location of service, and payor-specific coverage or billing rules.

5. Who reviews and acts on technology-generated information?

Hospitals should clearly define who is responsible for reviewing alerts, summaries, escalations, or recommendations generated through AI-enabled tools, EHR workflows, remote monitoring platforms, or virtual care programs. If a workflow generates information that requires clinical action, the hospital should have a clear process for review, escalation, documentation, and follow-up.

6. Does the workflow require medical staff or committee review?

Some technology-enabled workflows may require review through medical staff, clinical leadership, quality, compliance, IT, or other governance channels, particularly if the tool affects clinical decision-making, patient safety, documentation, or care delivery responsibilities. Hospitals should consider whether existing committees and policies are sufficient or whether additional review processes are needed for AI-enabled or virtual care workflows.

Looking Ahead

The AHA/West Health Accelerator reflects the continued push to move AI, virtual care, and EHR-enabled tools from limited pilots into broader operational use. For hospitals and health systems, broader implementation of these tools creates an opportunity to improve quality, safety, efficiency, and access. It also underscores the need for practical regulatory planning. As these tools become part of day-to-day care delivery, hospitals should be prepared to show not only that the technology works, but that it is being implemented consistently and with appropriate clinical and operational oversight. Hospitals should also build regulatory review into the implementation plan, with clear accountability for clinical review, documentation, billing, escalation, and ongoing monitoring.

Â鶹´«Ă˝ is here to help you address the short- and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Â鶹´«Ă˝ relationship partner, our Health Care & Life Sciences Sector, or to our Health Care Practice Group with any questions.