Artificial Intelligence (AI) and Extended Reality (XR) technologies present regulators with powerful tools to manipulate human behaviour, but more perniciously, human desire and indeed human being. This is because AI applications can interfere with our internal decision-making processes, and XR applications can affect our sensations by creating and mediating our experiences of the external world. When these technologically driven affordances are strained through contemporary cognitive science research to ground the notion that perceptions are processes for prediction error minimisation, such interferences can amount to designing and engineering the regulatee herself. Effectively, regulation no longer needs to be signalled in a normative regulatory environment, nor must it hardcoded into the architecture or technologically managed. Instead, AI and XR make it possible to design and create regulatees that embody the desired regulatory outcome. Paradoxically, however, such regulatory incorporation looks very much like the exercise of the agency of an agent and therefore is not recognised as a problem by contemporary legal principles and processes which seek to push back against obviously external influences or pressures. As a result, it is immensely difficult to articulate the legal or regulatory challenges posed by these developments, and to identify the harms through these doctrinal lenses.
These developments illustrate a distinction that can be drawn between turbulent legal disruption and transitional legal disruption. Turbulent legal disruption occurs where there is a great distance and divergence between prior expectation and subsequent experienced reality and captures the bulk of legal work concerned with new technologies. Transitional legal disruption is much more subtle in the sense that these involve phase transitions where the disruptive impulse has parlayed into a new equilibrium which in turn minimises the appearance of difference and disruption.
Thus, AI and XR threaten to precipitate a transitional legal disruption whereby both normative and architectural forms of regulation are superseded by an effective and irrevocable type of regulatee interference and manipulation. Yet, the novel equilibrium that settles around these new regulatory affordances minimises the recognition that foundational changes are underway. Yet, given the permanence and persistence of such a transitional legal disruption, powerful responses need to be considered and adopted to preserve human agency and autonomy into the future.