Could AI Conversations Put My Trade Secrets at Risk?
Dear Will & AiME,
Our employees regularly use AI tools to brainstorm ideas, draft documents, solve technical problems, and improve workflows. Some of those conversations involve proprietary information about our products and business strategies. Could these interactions create trade secret risks that we should be thinking about now?
— Vice President of Operations, Denver
Short Answer 💡
Yes. AI conversations can create trade secret risk when employees enter proprietary information into tools without clear safeguards. Companies can reduce that risk by using approved platforms, setting clear usage policies, reviewing vendor data practices, and training employees on what information should not be shared.
Dear Vice President of Operations,
Trade secrets have always depended on one simple principle: keep valuable information confidential.
AI enables employees to share information with external platforms quickly and efficiently. This creates an opportunity to extend existing confidentiality practices to a new category of business tools.
As AI becomes part of everyday work, businesses can apply the same information governance discipline to AI tools that they use for customer data, financial information, and other sensitive assets.
How AI Tools Expand Trade Secret Strategy
Many employees view AI as a productivity tool. They use it to refine presentations, troubleshoot technical issues, summarize documents, and generate new ideas.
To get useful responses, employees often provide context. That context may include:
Product roadmaps
Pricing strategies
Internal processes
Software code
Research and development efforts
Customer information
Employees often share details that have traditionally been highly confidential.
The more useful the AI interaction, the more context employees provide.
How Trade Secret Protection Works with AI
Trade secrets derive value from confidentiality.
Unlike patents, which require public disclosure, trade secrets remain protected because businesses take reasonable steps to keep them secret.
The legal question is whether a company has adequately protected its information.
Companies that implement appropriate safeguards for AI platforms can demonstrate reasonable efforts to maintain confidentiality.
The strength of protection depends on the specific facts, the platform involved, and the safeguards in place.
What to Know About AI Vendor Data Practices
Businesses should understand what happens after information is entered into an AI system.
Key questions include:
Is the information retained?
Can users delete it?
Is it used for model improvement?
Who can access it?
What contractual protections apply?
Reviewing platform terms is just as important as setting employee expectations.
Understanding how AI vendors handle information strengthens trade secret protection.
How to Govern AI Use for Trade Secret Protection
A practical approach starts with recognizing that AI use is already happening throughout the organization.
Businesses should identify:
Which AI tools employees are using
What types of information are being shared
Whether approved tools provide stronger protections
What policies govern AI use
Training helps employees recognize when an AI interaction involves confidential information.
Clear guidelines support better decisions and continued innovation.
Practical Steps to Protect Trade Secrets in AI-Enabled Workplaces
Organizations should review AI usage through the same lens they apply to other confidential information.
Consider:
Restricting the use of highly sensitive information in public AI systems
Implementing approved enterprise AI solutions
Reviewing vendor terms and data handling practices
Updating confidentiality and AI policies
Training employees on acceptable use
Trade secret protection depends on how businesses manage information in AI-enabled environments.
AI is a powerful tool for productivity and innovation.
Companies that bring AI into their information governance strategy gain two advantages: they unlock AI’s full potential while strengthening trade secret protection.
Businesses that manage AI conversations with the same discipline they apply to other confidential information will lead in both innovation and competitive advantage.
—Will & AiME
Three Takeaways:
Employees often share trade secrets when providing context to AI systems.
Trade secret protection depends on maintaining confidentiality through reasonable safeguards.
AI policies, vendor diligence, and employee training are essential components of trade secret protection.
