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  • Venus Caruso

Business Risks of Inputting Confidential Information into ChatGPT

In a prior post, I addressed the need for businesses allowing or banning employee use of ChatGPT for work to implement a ChatGPT use policy so that employees know the company’s position and to help manage risks. There, I recommended this policy restrict employees from inputting or uploading business confidential information to ChatGPT as there is no legitimate business reason for any employee to input or upload files containing this type of information. This article highlights several business risks of inputting confidential business information into ChatGPT to further emphasize why such a restriction is crucial to an organization's efforts to protect its business interests.

Data Breaches

ChatGPT is an AI language model hosted on a server. Any information inputted and uploaded to the server is processed and stored. If an employee inputs confidential business information into ChatGPT and ChatGPT suffers a data breach, this information may be exposed and accessed by such unauthorized individuals.

Unauthorized Access

If an employee inputs or uploads files containing confidential business information to ChatGPT, there is a risk of that information being accessed by other company employees who should not such access due to, for example, inadequate access controls or internal misconduct. In addition, and depending on the type of ChatGPT plan used, OpenAI staff may have access to that information when they should not.

Lack of Encryption

ChatGPT conversations may not always be encrypted end-to-end, depending on the platform or communication channels used. Without proper encryption, there is a risk that sensitive business information could be intercepted or accessed by unauthorized parties during transmission.

Inadequate Data Handling

ChatGPT processes and stores data in order to learn and generate better responses. There is a risk that the data handling practices surrounding ChatGPT may not meet necessary security standards, which may lead to potential vulnerabilities or misuse of confidential business information.

Compliance Violations

Depending on the nature of the confidential business information being inputted or uploaded to ChatGPT, there may be legal or regulatory compliance requirements that a business must follow. Inputting or uploading files containing sensitive business information without regard to applicable state and Federal data security laws results in non-compliant practices and may expose an organization to the risk of legal action.

Lack of Control Over Outputs

ChatGPT generates responses based on user prompts and data provided to it. While ChatGPT is a powerful resource, it is not flawless. There is a risk that ChatGPT may inadvertently disclose or mishandle confidential business information in the responses it generates due to its limitations in understanding or context.

Final Remarks

ChatGPT is a powerful tool that has proven to have many benefits, including boosting productivity and efficiency. However, it is a relatively new technology and is not flawless. Like any other software program or system, it is susceptible to data breaches and has already suffered from one. In addition, because this new AI technology is still in the learning and development phase, there is a risk that confidential business information provided to ChatGPT may be exposed to individuals who should not have access to such information. Unauthorized access may occur due to, for example, a lack of encryption, inappropriate data handling, lack of control over outputs, and internal misconduct. Furthermore, the handling of personal information of employees and customers are governed by state and Federal data security laws. The inappropriate input of such information to ChatGPT may violate these laws and expose an organization to legal action. Moreover, failing to have a ChatGPT use policy that restricts employees from inputting other types of confidential business information (e.g., financial data, trade secrets, confidential contracts, confidential email communications, privileged communications, etc.) may cause such information to lose the legal protections it was once afforded.

To manage these risks, businesses need to implement a ChatGPT use policy that restricts employees from inputting and uploading files containing sensitive business information and take proactive measures to ensure this policy is effective and being followed.


The information provided in this article is for general informational purposes only. Nothing stated in this article should be taken as legal advice or legal opinion for any individual matter. As legal developments occur, the information contained in this article may not be the most up-to-date legal or other information.


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