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Using AI in your business. What are the risks and opportunities?

The UK Government has recently published its White Paper on AI regulation, setting out details of its ‘pro-innovation’ approach. The White Paper is not firm guidance, but at this stage it sets out the Government’s plans, and they are seeking views through a supporting consultation.


Clearly, AI is a hot topic for business in the UK, and while the landscape around regulation evolves, it’s worth considering the risks and opportunities of using AI in your business now.


What is AI?


There is no one-size-fits-all definition of AI, but it can be described as: technology that works together to enable machines to understand, learn and act with human-like levels of intelligence. The types of AI that are used frequently by businesses include:


· ID verification

· Chatbots

· Smart digital assistants like Siri and Alexa

· Machine learning for large-scale document reviews

· Voice-to-text features like smart dictaphones

· Security surveillance

· Spam filters

· Fraud detection

· Generative AI for content creation (like Jasper and Chat GPT)


Opportunities


The opportunities for your business in using AI are fairly straightforward. You would expect to see an increase in productivity, while your employees spend less time on administrative tasks. You should see cost reductions in the business, after an initial outlay to install the technology. And all of this should lead to increased profitability.


Risks


However, with any new technology, there are inherent risks involved. As AI varies widely in its definition and application, you will need to consider the risks of a product on a case-by-case basis. But these are some of the common themes to look out for in your risk analysis:


Data breaches and privacy


The most topical example of the risk of data breaches is the increasing popularity of Chat GPT. Some high profile organisations, like Amazon, have banned their employees from using Chat GPT for this reason, and the technology has been banned altogether in Italy.


The problems arise when people input sensitive data into Chat GPT (often inadvertently). The technology is constantly learning and it learns from the input that users provide, which means that Chat GPT may use your confidential information to answer another user’s question.


Whichever new AI you want to use, think of the ways in which it could end up breaching privacy laws, such as the UK General Data Protection Regulation (GDPR). We can guide you through this process if you want a professional opinion.

Intellectual Property


It is not yet clear who owns the intellectual property rights from images and content produced by AI. As the technology is learning and evolving, it will use the work of established authors and artists. But when does the product of the AI’s work infringe on the original work of the author or artist? The answer to that question is not yet clear.


This is a good time to remind you to protect your own original designs and ideas. Anything that’s in the public domain is potential learning-fodder for generative AI, so it’s worth copyrighting and trademarking your valuable IP to protect it from regenerating as an AI product.


Liability for damage


Who is liable if the technology does something its not supposed to? For example, damage caused by a partially AI operated drone? Or a misdiagnosis made by medical AI software? You should make sure that your terms and conditions cover off the eventuality of unforeseen damage by the AI you want to install. Again, we can help you draft clauses to help protect your business.


A more restrictive approach in Europe


While the UK is promoting a ‘pro innovative’ approach, which appears to be light-touch regulation to AI, it’s a different story in Europe. The EU AI act is much more restrictive and imposes mandatory requirements on developers and users of AI.


If your business operates cross-borders, you are likely to need two separate policies on the use of AI for your UK entities and your European entities. What is permitted in the UK, may not necessarily be allowed in your European offices.


Conclusions


The use of AI in business is of course an evolving picture, and as innovations continue apace, it’s likely to stay that way for the foreseeable future. Using AI in your business should boost your productivity and profitability, but it’s not without its risks. If you’d like us to review your T&Cs or your policies to plug any gaps in your risk exposure, please get in touch.


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