The growing domain of liquidity in computing extends its boundaries to include advancements like liquid artificial intelligence (AI). Liquid AI leverages liquid software using isomorphic Internet of Things (IoT) architecture to enhance computation at the edge. This innovation unveils vast opportunities yet also introduces significant challenges, particularly around privacy and trust. We explore the vulnerabilities that might hinder the progression of this technological fusion toward achieving trustworthy AI. Through an intensive examination of the literature, this research highlights the heightened threats to data integrity and stakeholder trust in these evolving ecosystems. Four main challenges: Data collection, Data storage and Access, Data utilization and sharing, and Surveillance and profiling were identified and examined under privacy, and two, Algorithms and decision-making and Security of IoT infrastructure under trust. The concerns are further categorized to highlight their impact on the development of trustworthy AI. The study acknowledges the early state of the field. Consequently, this research navigates through the limited available literature, initiating a pioneering discourse emphasizing fostering a foundation for developing secure and trustworthy Liquid AI environments.