Why businesses may need to address AI in contracts
Major technological advances can revolutionize industries and change how businesses operate. They can also create new forms of liability and risk. Early adopters of new technology can improve efficiency and become more competitive.
Artificial intelligence (AI) shows promise in a variety of different sectors. AI can produce original works of art, on-demand videos and written text. AI can help people review written text and generate ideas. AI could assist with the medical diagnostic process or the review of an architectural design. And even as organizations start looking into ways to use AI to optimize company operations, they may also need to consider addressing AI in certain contracts.
What contracts may require AI clauses?
Anytime an organization hires a professional or brings in outside support for a project, clauses addressing AI may be valuable contract inclusions. Workers ranging from marketing professionals creating a new ad campaign to design professionals might try to pass off much of their work to AI software.
Obviously, if a company simply wanted AI products or analysis, it could arrange to license AI software and handle that process internally. Hiring a human professional to provide services typically means wanting human work on a project. Including clear terms about not using AI to produce text, art or other work for the company can help limit the risk of worker and contractor misuse of this technology.
Similarly, companies offering services to customers may want to add provisions about AI into client or customer contracts. Committing to human services and production processes can provide potential consumers with peace of mind and might justify a higher price for services that are cheaper when provided using AI.
For the time being, AI remains unpredictable and somewhat unreliable. Text-generation software, in particular, is prone to significant errors and oversights because it learns based on information available online. AI-produced graphic images may infringe on the copyrighted creations or styles of creative professionals, while written content could contain major inaccuracies. Organizations have much to lose if employees or service providers misuse AI.
Addressing potential technological issues that could damage a company’s reputation or lead to business litigation can help limit legal controversy. AI may prove beneficial for organizations in the long run, but they may also need to address the risks created by AI proactively in contracts to avoid controversy down the road.