AI and generative AI are revolutionizing the software industry, opening up new possibilities for increased productivity, innovative solutions, and the generation of unique and relevant information on a massive scale. However, as gen AI becomes more widespread, it brings with it concerns surrounding data privacy and ethical considerations.
The Compliance and Privacy Risks of Unchecked Gen AI Use
The allure of gen AI and large language models (LLMs) lies in their ability to consolidate information and generate new ideas. However, these capabilities come with inherent risks if not appropriately managed. Unchecked gen AI use can unintentionally give rise to issues such as:
- Data privacy breaches
- Copyright infringement
- Consumer protection violations
- Violations of data protection laws
It is crucial to be cautious and implement best practices to limit these risks and maximize the potential offered by this powerful technology.
Navigating the Evolving Legal Landscape
The legal guidelines surrounding AI are evolving, but not at the same pace as AI vendors introduce new capabilities. Companies cannot afford to wait for the dust to settle and risk losing market share and customer confidence to faster-moving competitors.
“It behooves companies to move forward ASAP — but they should use time-tested risk reduction strategies based on current regulations and legal precedents to minimize potential issues.” – Anonymous
While AI giants have been the primary targets of lawsuits related to their use of copyrighted data for training models, they are not the sole companies grappling with risk. When applications heavily rely on a model, the presence of an illegally trained model can taint the entire product.
A notable example is the case of the app “Every,” whose parent company Everalbum faced repercussions when the Federal Trade Commission (FTC) charged them with deceiving consumers about their use of facial recognition technology and improper retention of user data. As a result, Everalbum was required to delete the collected data and any AI models developed using that data, leading to the company’s shutdown.
Regulatory Developments: Transparency and Compliance
Regulations addressing AI use are emerging globally. States like New York have introduced or are considering laws to regulate AI in areas such as hiring and chatbot disclosure. In the European Union, the AI Act is currently under negotiation and is expected to pass by the end of the year. This Act would mandate transparent disclosure of AI-generated content and additional requirements for high-risk use cases.
“It is clear that CEOs feel pressure to embrace gen AI tools to augment productivity across their organizations. However, many companies lack a sense of organizational readiness to implement them.” – Anonymous
Despite the uncertainty surrounding regulations, companies can still establish best practices and prepare for future compliance by leveraging existing laws and frameworks. Data protection laws, for instance, provide provisions that can apply to AI systems, including requirements for transparency, notice, and adherence to personal privacy rights.
Implementing gen AI responsibly requires careful consideration of the following best practices:
- Robust data governance
- Clear notification processes
- Detailed documentation
By following these practices, privacy and compliance teams can effectively navigate the evolving landscape and capitalize on the transformative potential of AI.
Embracing the Future of AI
The advent of AI models like Claude, ChatGPT, BARD, and Llama promise unprecedented opportunities to utilize the vast amount of data collected by businesses. These models enable businesses to uncover new ideas and connections that can revolutionize their operations.
However, change always carries inherent risks, and it is essential for privacy professionals and legal teams to be prepared. With a strong foundation in robust data governance, clear communication with stakeholders, and meticulous compliance efforts, businesses can navigate the regulatory landscape successfully and fully harness the immense potential of AI.
“By starting with robust data governance, clear notification and detailed documentation, privacy and compliance teams can best react to new regulations and maximize the tremendous business opportunity of AI.” – Nick Leone, Product and Compliance Managing Counsel at Fivetran
“Seth Batey is Data Protection Officer, Senior Managing Privacy Counsel at Fivetran.
