AI Considerations for In-House Counsel

The use Artificial Intelligence (AI) tools has increased dramatically in the past six months, fueled in no small part by the launch of the ChatGPT last November. Although sophisticated algorithms are part of many commonly-used technology solutions, company management and legal departments have found themselves often unprepared to assess and manage the risks associated with business use of generative AI, and other AI technology. Developing and implementing a policy and governance program for AI use requires understanding the specific use cases for AI, the inputs and outputs and how the processing works, how the AI impacts the company, people and other entities, what laws apply, and what and when notice and consent are required or prudent. Having a policy that outlines acceptable use, and documenting assessments that establish that AI systems are used in a manner consistent with the policy and that the benefits outweigh potential harms, can go a long way in managing legal and reputational risk.

Understand the Terms of Art

The increase in use and application of AI has resulted in a lot of jargon floating around. At its core, AI is automated processing of data, based on training data and processing prompts, that can generate outputs for specified objectives, such as predictions, recommendations or objectives. Understanding the key terms and making sure that your team has a common understanding of these terms is important to understanding and assessing AI risks and policy. A lexicon is included as an appendix. And, as the Federal Trade Commission (FTC) warns: "AI is defined in many ways and often in broad terms … it may depend on who is defining it and for whom … what matters more is output and impact."

Educate Stakeholders On AI Risks and Regulation

One common misconception about AI is that it is not regulated. In fact, existing privacy, intellectual property, and employment laws, just to name a few, already regulate AI, its use, its inputs, how those data inputs are or were collected and, whether an AI system user has a legal right to use the inputs, decisions made by AI and its other outputs, the effects of those decisions and outputs, and so on.