Using AI in Business

AI is transforming the way businesses work—boosting efficiency, improving customer experiences, speeding up content creation, and providing better access to information. But while the benefits are significant, using AI also comes with legal risks that need to be carefully managed. From data security and IP ownership to liability and compliance, it’s crucial to understand what you’re agreeing to when adopting an AI tool—and where possible, negotiate the terms to reduce exposure. Here’s a plain-language guide to the key legal issues you should be thinking about:

Data protection and privacy remains a top priority. AI systems often process large volumes of sensitive information. Often this processing occurs on IT systems owned/controlled by third parties, meaning data is being transmitted out of the users’ environment. Businesses must ensure compliance with confidentiality obligations, privacy, and ensure data is protected. Ensuring sensitive data is not provided to public models is important but so is ensuring that internal protections are maintained (for example by using role-based provisioning). Collecting, storing, processing and sharing personal information will also trigger privacy and potentially GDPR obligations.

IP ownership and use rights are important. You will need to understand who owns the IP rights associated with AI created content, and what the scope of your use rights are. In some cases, the AI provider will own the AI content created, and commercial use of AI created content may not be permitted. Broad licenses may apply to prompts and input material.

Likewise, liability for AI-created content is still evolving. A clear contract stating who is responsible for the AI created content, accuracy and its use, needs to be clearly set out. This should include what happens if third party IP rights are infringed by the AI created content, or where AI created content is inaccurate. Liability can come in other forms too, for example, indemnities provided by the user in relation to input material and usage. It is clear that AI providers are more likely to provide a higher level of protection where a paid subscription is provided, and where the AI tool is specifically trained for your use case.

Establishing a clear AI policy for your business is essential for defining acceptable use, oversight responsibilities, employee access and to implement any required guardrails. These policies should be regularly updated to reflect changes in technology and regulation, and ensure transparency with stakeholders. This should be followed with ongoing training and awareness to help employees use AI tools effectively while understanding their limitations and policy requirements.

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With the right safeguards and smart planning, AI can be a game-changer for your business. If you're exploring AI adoption or reviewing your existing legal framework, we can help assess risks and ensure you’re protected.

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