An AI risk manager is reviewing an organization's AI procurement process. The organization plans to use a cloud-hosted AI API from a major provider for sensitive HR decisions. Which risk requires the MOST specific contractual attention?
Select an answer to reveal the explanation.
Short Explanation and Infographic
Here's the deal — b is correct because sensitive HR data submitted to a cloud AI API creates significant risk if the provider uses it for model training — the organization needs explicit contractual assurances prohibiting use of submitted data for training and data processing agreements compliant with GDPR and other applicable privacy regulations. A and C are service quality concerns.
Full explanation below image
Full Explanation
B is correct because sensitive HR data submitted to a cloud AI API creates significant risk if the provider uses it for model training — the organization needs explicit contractual assurances prohibiting use of submitted data for training and data processing agreements compliant with GDPR and other applicable privacy regulations. A and C are service quality concerns. D is a vendor due diligence factor but secondary to the data use risk.