“AI contracts often function as the mechanism through which governance expectations are converted into operational obligations.”

“AI procurement is no longer simply about acquiring technology. It is increasingly about preserving strategic flexibility and avoiding excessive dependence on any single provider.”

As enterprise AI moves from pilot projects to business-critical infrastructure, contracts governing its procurement are becoming the primary mechanism for AI governance. Boards, senior management and procurement teams traditionally often place focus on data ownership when AI services are procured from third parties, but data ownership is only the starting point. The more significant questions concern how the information supplied may be used after the end of the contractual arrangement, who controls the resulting capability if the relationship between the organisations providing the information and the AI service providers changes, and who remains accountable when an AI system produces unexpected outcomes.

This article examines how enterprise AI contracts allocate value, control and accountability across the parties involved, and sets out a practical framework for reviewing existing or proposed AI arrangements before problems arise.

Read the full article here.