Artificial Intelligence (AI) continues to dominate many of today’s business and commercial conversations.

With the rapid development of increasingly sophisticated AI tools, many businesses are exploring the possibilities of integrating AI into their operations to unlock efficiencies and opportunities.

However, alongside these opportunities come legal and operational risks. The regulatory landscape in the UK is still evolving, with the Government currently reviewing responses to its UK Copyright and AI consultation (which closed in February 2025). As such, the risks and rewards of incorporating AI tools into your business must be carefully weighed.

We set out here our key considerations and top tips to help businesses which are looking to harness the benefits of AI in their business, whilst protecting their intellectual property (IP) and data, maintaining confidentiality, and ensuring legal compliance.

Top Tips

1. Review terms and conditions carefully

Before using any AI tool, always review the operator’s detailed terms and conditions (T&Cs) on their website. These often include broad disclaimers and limitations of liability, which are unlikely to offer adequate protection for your business, both for any information which you input into the AI tool, and in any output which you may wish to use in your commercial operations.

Free tools typically pose higher risks with (generally non-negotiable) one-sided terms that offer minimal protection. Paid services can offer better, but still limited, protection. In some cases, bespoke terms can be negotiated for paid services, depending on the operator and the size of the deal.

To secure copyright ownership of AI-generated content, businesses may need to engage directly with the operator to negotiate specific clauses to obtain a copyright assignment or exclusive licence. Note that while some operators claim that users own the copyright in generated content, this is unlikely to be legally effective if appropriate wording is not included in the full T&Cs.

Also be aware that many generative AI models are trained on third party data sets, which raises IP infringement concerns. Using AI-generated content commercially could expose your business to legal risk by infringing upon the IP rights of various other authors. This is an area currently under legal scrutiny in several jurisdictions, including the UK.

2. Protect IP, proprietary information and personal data

Avoid inputting your company IP, proprietary information, or any personal data into AI tools unless you are sure that you are doing so within a protected environment. Many AI tools retain user input and use this as data for fine tuning or learning from. Inputting sensitive information or IP into an unprotected or public AI system may result in that data being retained, learned from, and inadvertently reused in responses which the AI tool may provide to other users in future. In addition, that data will be processed and stored on the AI operator’s servers which may be located in another jurisdiction. This presents numerous data protection issues including unauthorised data transfers, and uncertainties around whether or how that data is protected.

To mitigate these risks, it is essential to check the terms of use for any AI tool as well as to conduct appropriate wider due diligence before inputting any of your IP, proprietary information, or any personal data. Pay particular attention to how and where your input data may be stored, processed, and reused, and what rights you may be granting over your content.

It is also worth considering:

• Using enterprise-grade AI tools with clear data handling policies,
• Conducting due diligence on how input data is stored, processed, and reused,
• Implementing strong cybersecurity protocols (and ensuring that all staff are trained on these) to help safeguard company data and protect IP, and
• Ensuring that no personal data is input into unprotected AI environments.

3. Verify AI-generated outputs

AI tools can produce convincing but inaccurate or misleading results, a phenomenon known as “hallucination”. Make sure to always verify outputs to ensure their accuracy before relying on them for decision-making or public-facing content.

4. Establish an AI usage policy

Develop a clear internal policy governing how AI can be used within your business. This should reflect your business’s risk appetite, and comfort with using AI for business purposes. Key points to cover include:

• Guidelines on acceptable use,
• Requirements for human oversight,
• Procedures for conducting impact assessments to identify and mitigate risks such as bias or potential harm.

5. Provide staff training

Ensure that all of your staff understand your AI policy, are trained on the responsible use of AI tools, and understand the risks they could incur by failing to follow the AI policy. Training should cover practical examples of acceptable and unacceptable use of AI within your business, as well as data privacy and cyber security, legal and ethical considerations.