The widespread use of artificial intelligence (AI) technologies by businesses has made it necessary to reassess the legal relationships between companies and technology providers. Today, many businesses obtain AI services from third-party providers instead of developing their own AI systems.

Cloud-based AI services, generative AI tools, automation platforms and AI-assisted software offer businesses significant advantages, but they also create new legal risks in terms of data use, confidentiality, intellectual property rights, service continuity and the sharing of liability.

AI contracts are specialised contracts that regulate the terms of use of AI services, the rights and obligations of the parties, data processing activities and the legal mechanisms that will apply if risks materialise.

Why Is a Specific Contract Needed When Using an AI Service?

There are important differences between traditional software contracts and contracts for AI services.

In conventional software use, the main issues are usually the licence and technical support, whereas with AI systems the data used, the outputs generated, the way the model works and continuously evolving algorithms also require legal assessment.

When a company uses an AI service, it does not simply buy software; it also enters into a new legal relationship connected with data flows, automated processing and third-party technology infrastructure.

The Role of the Parties in AI Contracts

In AI contracts, it is very important who the parties are and in what capacity they act.

On one side is the provider that develops the AI model or offers it as a service; on the other is the business that uses this technology in its own activities.

In some cases, the business may be not only a user but also a provider that carries out development on the AI system or offers AI-assisted services to its own customers.

Correctly identifying the legal role of each party is critical for allocating responsibilities and obligations correctly.

Data Use in AI Contracts

Data is one of the most important elements of AI systems. Data use is therefore at the heart of AI contracts.

The contract should clearly set out which data will be used, for what purposes it will be processed, the provider’s right of access to this data and the retention periods.

In particular, where customer information, employee data, trade secrets or special categories of personal data are transferred to AI systems, data protection obligations must be assessed separately.

Protection of Data Entered into AI Systems

As generative AI tools come into use within companies, one of the significant risks is controlling the information that employees enter into these systems.

An employee may unknowingly transfer the company’s confidential information, customer data or business strategies to an AI system.

For this reason, companies need to adopt AI use policies and include data security provisions in their contracts.

Who Owns the Rights to AI Outputs?

Who owns the content and outputs created by AI is one of the most important issues in AI contracts.

It should be clearly determined who holds the right to use a text, image, design, software code or analysis result created by an AI system.

Otherwise, companies may face uncertainty about the legal status of the content they use for commercial purposes.

Regulating Intellectual Property Rights in the Contract

In AI services, not only the content produced but also the models, software, data sets and development processes used are important from an intellectual property perspective.

The contract should clearly regulate who owns the existing intellectual property rights, how rights in newly developed work will be shared and what the limits of use will be.

Intellectual property provisions are of critical commercial value, particularly for companies that develop AI-based products.

Service Levels and AI Performance

Unlike traditional software, the performance of AI services may not always be constant.

Because of model updates, changes in data or changes in the provider’s infrastructure, the quality of the results may change over time.

For this reason, it is important to set out service levels, availability rates, technical support procedures and performance criteria in the contract.

The contract should clearly regulate how the parties’ liability will be determined if AI systems produce incorrect results.

If a system makes a wrong analysis, produces incorrect content or creates a security problem, it should be determined in advance which party will be liable and to what extent.

If the liability provisions are not clear, companies may face serious legal risks in the event of a dispute.

Confidentiality Arrangements with AI Providers

One of the main expectations of companies when using AI services is the protection of confidentiality.

The contract should clearly regulate the protection of trade secrets, the use of customer information, the security of employee data and sharing with third parties.

In particular, the uncontrolled sharing of information that provides a competitive advantage through AI systems may cause serious commercial losses.

Audit Rights in AI Services

It is important for companies to have sufficient information about the AI systems they use.

For this reason, the contract may provide for the provider’s obligation to give information on certain matters, disclosure of security procedures and, where necessary, audit rights.

Auditability is an important legal requirement, especially for AI systems used in high-risk areas.

Termination and Transition in AI Contracts

The termination of AI services is also one of the issues to consider when drafting the contract.

It should be determined how data will be returned if the service ends, how it will be removed from the system, what the status of use of the content created will be and how the transition period will be managed.

Incomplete termination provisions may leave companies dependent on their technology provider.

The Importance of AI Contracts for Companies in Türkiye

As the use of AI spreads rapidly in Türkiye, many companies obtain services from foreign technology providers.

The standard contracts used in international AI services may not always fully meet companies’ legal needs.

For this reason, it is important for companies to have contractual arrangements suited to their field of activity, data structure and commercial objectives.

Legal Protection in AI Contracts

While AI technologies offer businesses great opportunities, the safe use of these technologies requires a strong legal foundation.

Well-drafted AI contracts give companies a significant advantage in terms of data security, intellectual property rights, sharing of liability and protection of their commercial interests.

In the age of AI, contracts represent not only the agreement between the parties but also a mechanism of protection against technological and legal risks that may arise in the future.

AI Contracts