AI Tools and Confidential Information: A Contract Clause Every Business Sho

Paying for an AI subscription does not automatically mean your business data is protected under a fundamentally different privacy regime. This is a common misconception — and one with real legal consequences.

From a cybersecurity and legal perspective, this issue matters not only for internal company policies, but also for contracts with customers, partners, consultants, and other counterparties. Wherever parties exchange confidential, personal, or otherwise sensitive information, contractual safeguards should specifically address how AI tools may be used in connection with that information.

A practical starting point is to include an express contractual obligation. At Zilver, we recommend clients consider the following clause as a minimum safeguard:

"The Parties undertake, in the course of performing this Agreement and in connection with the provision, receipt, processing or exchange of any Sensitive Information, to use only business, enterprise or other professional subscriptions of AI-based services that are specifically intended for business use and provide appropriate data protection safeguards.

Each Party shall regularly review and assess the applicable terms of use, privacy policies, data retention provisions and other data protection conditions of the AI services used by it.

In any event, neither Party shall, without the prior written consent of the other Party, provide, upload, disclose or otherwise make available to any AI service any Personal Data or any information protected under or expressly designated as confidential under the applicable NDA."

This clause is not a substitute for a comprehensive AI and cybersecurity policy — but it provides a practical minimum safeguard at the contractual level. As the rules and privacy terms of AI providers continue to evolve quickly, contractual language addressing AI use should be reviewed and updated regularly to keep pace with the technology and applicable policies.

Want to make sure your contracts properly address AI-related data risks? Zilver's legal team can help you review your existing agreements or draft tailored AI-use provisions for your business.

Contact Zilver Law Firm to discuss how to protect your business data in the age of AI.