The most consequential risks in SaaS agreements rarely appear in headline provisions. Instead, they are embedded in data usage or service improvement clauses, where vendors are often granted broad rights to use customer data. While such language may appear routine, its scope has expanded significantly with the rise of artificial intelligence. “Service improvement” increasingly encompasses the use of customer data to train, fine-tune, or otherwise enhance AI models.
This shift is not merely theoretical. Numerous SaaS providers have revised their terms of service to expand data usage rights related to AI, frequently through unilateral updates rather than negotiated contract amendments. This “quiet update” approach allows vendors to introduce materially broader data rights without drawing focused attention. These updates often include expansive license grants permitting the use of customer inputs, prompts, and outputs for model development and optimization.
