5 Questions to Ask Every AI Vendor About Data Privacy

Before signing a contract with an AI vendor, make sure you can answer these critical data privacy questions. The answers could save you from compliance violations, security breaches, and reputational damage.

1. Where Is My Data Stored and Processed?

Data residency matters, especially for organizations subject to GDPR, CCPA, or industry-specific regulations. You need to know:

Which data centers will store your data?
Will data ever be transferred across borders?
Can you specify data residency requirements?

2. How Is My Data Used for Model Training?

Many AI vendors use customer data to improve their models. This raises important questions:

Will our data be used to train models that serve other customers?
Can we opt out of data being used for training?
How is training data anonymized or de-identified?

3. What Happens to My Data When the Contract Ends?

Data portability and deletion are crucial considerations:

Can we export all our data in a standard format?
How long does data deletion take?
How is deletion verified and documented?

4. Who Has Access to My Data?

Understanding access controls is essential:

Which vendor employees can access customer data?
Are access logs maintained and available for audit?
What background checks are performed on personnel with data access?

5. What Security Certifications Do You Hold?

Certifications provide third-party validation of security practices:

SOC 2 Type II for security controls
ISO 27001 for information security management
HIPAA BAA availability for healthcare data
FedRAMP for federal government use

Getting the Answers

Don't accept vague responses to these questions. Request documentation:

Privacy policy and data processing agreement
Security certifications and audit reports
Data flow diagrams
Incident response procedures

If a vendor can't provide clear answers, consider it a red flag. The right vendor will embrace these questions as an opportunity to demonstrate their commitment to data privacy.