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Contracting Pointers for AI Providers and Companies Incorporating AI in Their Products and Services

02.13.2024 | 12pm-1:30pm CST

Koley Jessen attorneys Maureen Fulton and Jack Horgan are participating in a Strafford CLE webinar discussing contract considerations for AI providers and businesses that incorporate generative AI into their products and services. Fulton and Horgan will address the unique aspects and complexities of AI and provide drafting tips for AI user agreements that apportion risk, protect the AI provider's interests, and comply with legal and ethical guidelines while also providing users with transparency regarding data handling.


Businesses across every industry are considering ways to incorporate AI into their products and services. AI providers can be the actual developers of the foundational model for an AI solution or application developers may build on that foundational model or otherwise make it available as part of larger offerings. All businesses that incorporate AI into their products and services need to consider various contractual provisions, whether their contracts take the form of "standard terms and conditions" agreed to via click-through mechanisms or negotiated contracts.

AI service providers must apply well-known legal concepts to lesser-known AI elements in their user agreements. Parties experienced with SaaS agreements will find some familiar landscape, and indeed AI solutions are often provided by SaaS. However, AI providers should be prepared for unique issues and more complexity--and potential risks and liabilities--associated with an array of types and sources of data that train, fuel, guide, emanate from, and modify generative AI-based models, solutions, and systems.

Some of the key issues and provisions that should be addressed by AI providers in their user agreements include third-party terms from frontier model providers; training data and prompts; liability for outputs; intellectual property-related representations, warranties and indemnities; ownership of AI output and improvements to AI models; data privacy considerations; and compliance with current and future laws and regulations.

Listen as Fulton and Horgan discuss the unique issues and risks presented by AI and the key concepts AI providers should address in their user agreements to protect their legal and financial interests as well as mitigate their risk of liability.

For more information and to register, visit Strafford's event page.

To view the presentation slides, click here

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