AI Applications and Legal Concerns: Recognizing the Major Threats in Business and Law for Chatbots and Generative Artificial Intelligence
In the rapidly developing world of AI, businesses are increasingly adopting generative AI tools like ChatGPT. However, these tools pose several legal and business risks that organizations must address to ensure compliance and avoid potential liabilities.
This week, WilmerHale lawyers Kirk Nahra, Benjamin Powell, Matthew Ferraro, Natalie Li, and Ali Jessani will lead a webinar titled "The Revolution Will Be Synthesized: A Webinar Series on Legal Developments in the Age of AI." This is the second webinar in the series, offering practical advice on how to address the identified legal and business risks.
Legal Risks
One of the primary concerns is copyright infringement. Generative AI models often train on vast datasets that may include copyrighted materials. Using these tools to create content without proper permissions can lead to copyright violations. To mitigate this risk, businesses should ensure that employees understand copyright laws, obtain necessary licenses for input data, and implement rigorous review processes to detect potential infringement.
Another risk is defamation and misinformation. AI-generated content can spread misinformation or defamatory statements, potentially harming individuals or organizations. To prevent this, businesses should implement robust fact-checking and oversight processes.
Privacy violations are also a significant concern, especially when using generative AI for tasks like onboarding employees or processing personal data. To address this, businesses should review privacy policies, ensure that AI tools comply with data protection regulations, and use secure and transparent data handling practices.
Business Risks
Reputation and trust are crucial for any business. AI "hallucinations" or incorrect outputs can damage a company's reputation and erode customer trust. To mitigate this risk, businesses should conduct regular audits and implement quality control measures to ensure AI outputs are accurate and reliable.
Transactional risks can complicate investments or acquisitions if AI-related risks are not properly addressed. To mitigate this, businesses should conduct thorough risk assessments and implement best practices for data management and compliance.
Over-reliance on AI without proper oversight can lead to operational inefficiencies and missed opportunities. To balance automation with human oversight, businesses should ensure AI tools support business goals while maintaining compliance and ethical standards.
Strategies for Mitigating Risks
To effectively manage these risks, businesses should focus on data quality and licensing, implementing robust risk management processes, developing comprehensive compliance frameworks addressing intellectual property, data privacy, and sector-specific regulations, and educating employees on the ethical use of generative AI tools and the importance of legal compliance.
Online participation in the webinar allows for submitting questions, and CLE credit will be awarded to attendees of the live webinar. However, CLE credit will not be offered for those who watch a recording of the webinar.
The use of generative AI tools offers opportunities, but also carries significant legal and ethical risks. By understanding these risks and implementing effective strategies, businesses can harness the benefits of generative AI while minimizing potential legal and business liabilities.
[1] Kirk Nahra, Benjamin Powell, Matthew Ferraro, Natalie Li, and Ali Jessani, "AI Hallucinations: The Challenge of Legal and Ethical Risks in Generative AI," WilmerHale (2021).
[2] Natalie Li, "Managing AI Risk: A Practical Guide for Companies," WilmerHale (2021).
[3] Kirk Nahra, Benjamin Powell, Matthew Ferraro, and Ali Jessani, "AI and Misinformation: A Legal and Ethical Analysis," WilmerHale (2020).
[4] Natalie Li, "Data Privacy in the Age of AI: A Practical Guide for Companies," WilmerHale (2020).
[1] Artificial-intelligence (AI) tools like ChatGPT present opportunities for businesses, but their adoption can introduce legal and business risks.
[2] In the webinar titled "The Revolution Will Be Synthesized: A Webinar Series on Legal Developments in the Age of AI," Kirk Nahra, Benjamin Powell, Matthew Ferraro, Natalie Li, and Ali Jessani will discuss strategies to manage risks associated with AI and copyright infringement, defamation and misinformation, privacy violations, reputation and trust, transactional risks, and the importance of ethical use of generative AI tools.
