Source: Business Insider

Business Insider highlights the significant and often underestimated legal risks that companies face when their employees use public generative artificial intelligence platforms like ChatGPT. The article explains that when employees input sensitive, confidential, or proprietary company information into these AI models—whether for drafting documents, analyzing data, or writing code—that information can be absorbed into the AI's training data. This creates a severe risk of that information being leaked or inadvertently shared with other users in the future.

This practice exposes companies to a multitude of legal threats. It could result in the public disclosure of valuable trade secrets, a breach of non-disclosure agreements (NDAs) with clients, and violations of data privacy regulations. The article warns that such incidents are likely to trigger a new wave of costly lawsuits, including litigation from clients whose confidential data was compromised or from competitors if trade secrets are exposed. Consequently, companies are now racing to establish clear and strict internal policies that govern the use of public AI tools, aiming to educate employees on the risks and prevent catastrophic data leaks before they occur.