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ARTICLE · 08 JULY 2026

Legal Risks Your AI Tools May Create

Gesmer Updegrove LLP
Gesmer Updegrove LLP
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Gesmer Updegrove LLP

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Every startup uses AI tools. Many founders, and their employees and contractors, have not read the terms those tools come with. That is not a criticism as those agreements are long, dense, and easy to click through.

United StatesCorporate/Commercial Law
Dallas K. Mosier
Dallas K. Mosier

Every startup uses AI tools. Many founders, and their employees and contractors, have not read the terms those tools come with. That is not a criticism as those agreements are long, dense, and easy to click through. But the legal risk embedded in them is real, and it does not announce itself at the point of purchase. It shows up later, in a financing or acquisition diligence process, when a customer asks a hard question about how their data was handled, or upon the receipt of letter from a consumer protection attorney on behalf of their client. While the benefits of AI tools are undeniable, there are some risks that bear attention and there are a few concrete steps founders can take to get ahead of them.

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