BLOG

Before You Hit “Accept”: Top 5 Tips for Reading the T&Cs of Off-the-Shelf AI Tools

AI tools have reached the tipping point for small businesses. In a September 2024 survey by The U.S. Chamber of Commerce and Teneo, nearly every small business – 98% – said they are utilizing a tool that is enabled by AI with 40% using generative AI tools like chatbots and image creation*.

This transformation brings with it healthy doses of excitement, fear and trepidation, especially when it comes to your company’s data. The Terms & Conditions (T&Cs) behind many of the off-the-shelf AI tools aren’t the standard software terms we’ve all fallen into the routine of hitting “Accept” without reviewing. Popular Large Language Models (LLMs) like ChatGPT and the zillions of tools that use their models to provide AI services all rely on data to fuel their neural networks and sharpen their pattern recognition, the basis for the interactions that mimic human intelligence. And it is why data privacy, security and ownership clauses in these contracts are vastly different from standard software terms.

So before you click Accept, here’s five clauses it’s imperative you truly read.

1. If you’re not paying with dollars, you’re probably paying with data.

AI tools get smarter by learning from you (and everyone else whose data is used for training) courtesy of the inputs you give and interactions you have with the platform. That means the very first thing to check in any T&Cs is how the tool uses your data.

What to look for:

  • Does this platform use my data to train its models?
  • Do different plans have different data usage guidelines?
  • Can I opt out if my data is used for training? If yes, how?

Key Takeaway: Many LLMs tap data from users on Free plans to fuel future model training, while paid plans often provide separation between your data and their training. “Often” does not mean always, and sometimes you must manually exclude your data. The key is – as it will be in every one of our recommendations – Read before you Accept.

2. Your data needs a bodyguard, not just a login.

Off-the-shelf AI platforms don’t only store your data. They can copy it, manipulate it, process it and sometimes even move it across borders if you aren’t careful. This can expose most small business owners to additional liability risks they don’t see coming. Especially if you’re working with customer data, employee info, or proprietary content. Before you trust an AI tool with sensitive information and sign on the dotted line, you need to know exactly how and where your data is handled.

What to look for:

  • Does the platform encrypt your data both in transit and at rest?
  • Do they meet recognized data and security standards like SOC2, ISO27001, HIPPA, GDPR, CCPA, etc.?
  • Where is your data stored and processed? Which country, which cloud provider and under what laws?
  • Does the vendor allow third-party access or subcontractors, and under what terms?
  • Are there clear timelines for data deletion if you cancel or stop using the platform?

Key Takeaway: Look for vendors that talk explicitly about AI security practices and standards, not just general cybersecurity. If the terms are vague or overly broad, assume the protections are too.

3. Just because it was built with your data, doesn’t mean you own it.

Most of these tools are referred to as Generative AI because – you guessed it – they generate new content from the data they have been given. So when you’re working with one of these systems, who owns what is created? Many off-the-shelf tools include terms that give themselves license rights to use, share, or even commercialize the outputs generated on their platform, even if those outputs are based on your proprietary data.

What to look for:

  • Who owns the AI-generated content? You, the platform or both?
  • Are there any “joint rights,” “derivative works” or “license to use” clauses? What do they provide to the software company versus you?
  • Do the terms restrict how you can use what you generate? Internal use only, not for commercial sale, etc.?

Key Takeaway: If an off-the-shelf AI tool helps you create something central to your business, such as training material or a product design, you’ll want full control and clarity on ownership. Don’t assume it’s yours just because it came from your prompt.

4. You’re still in charge, even when AI is doing the work.

AI can aid in efficiency and speed, but it doesn’t guarantee accuracy, fairness, or compliance. Whether it’s accessing patient records, analyzing candidates for hiring, or drafting sensitive content that is bound by an NDA, the responsibility still falls on you to make sure it’s right…And legal. If you’re using AI for anything that touches hiring, healthcare, financial decisions, or compliance-driven tasks, you need to know how the tool handles risk. Don’t assume it’s playing by your rules, rather make sure it’s written into theirs.

What to look for:

  • Disclaimers about output accuracy or reliability (they’re almost always in there)
  • Language that puts the burden of verification on you (also quite common)
  • Any clauses that deny liability for misinformation, bias, or harm
  • Commitments (or lack of) to regulatory compliance—HIPAA, GDPR, EEOC, etc.

Key Takeaway: As we always preach at Trybl, treat any AI solution like a promising intern: useful, fast, smart and largely capable but not yet trustworthy enough to fly solo.

5. No one wants a bad breakup.

The pace of AI advancements is mind-boggling. New features roll out before you learned the current ones. Models get upgraded before you see any limitations to the old one. And to go right along with those moves, T&Cs of off-the-shelf AI tools get rewritten at almost as dizzying a pace. That’s part of the promise, and also part of the risk.

If an update suddenly changes how the tool performs for you, suddenly you might find yourself stuck with a tool that no longer fits your business. And if you can’t easily export your data or models, switching vendors can feel more like starting over.

What to look for:

  • Does the vendor give you notice (30+ days) before making material changes to the product or terms?
  • Can you opt out of updates that affect your integrations, workflows, or user access?
  • Are there documented exit options, including data portability, export formats, or API access?
  • Can you retrieve both your raw data and AI-generated content before terminating?
  • And finally (not limited to just AI tools by the way) – Is there an auto-renewal clause that could lock you in for another term without warning?

Key Takeaway: Choose vendors that are upfront about versioning, model updates, and sunset timelines. Bonus points if they offer backward compatibility or let you freeze your configuration. Your workflows shouldn’t break just because your AI got “smarter.”

One Last Thing…

Off-the-shelf AI tools aren’t just another addition to your tech stack. When deployed well, they become partners in decision-making, inputs into workflows and tech teammates for your employees. That makes the fine print in these T&Cs just as strategically important as the details of any customer contract or vendor deal.

Before you lock into a platform, run the terms past both your legal team and someone who understands how AI really works, not just how a tool is marketed on a website. Skipping that step can cost you more than a surprise renewal fee. It can compromise your data, your IP or even your customers’ trust.

Can’t find a tool that checks all your boxes once you dig into the T&Cs? Then it might be time to build one that does. A partner like Trybl can help you create AI tools built for your business – not just for businesses like yours. You keep control of the data, the decisions and the outcomes. As it should be.

*https://apnews.com/article/small-business-artificial-intelligence-productivity-f6fa7b2a1ce0a9f2e5b8b48670b3098a