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Artificial Intelligence and Data Privacy: What to Expect in 2025

Writer's picture: Lynn RohlandLynn Rohland

U.S. Unveils Massive AI Investment

On January 21, the United States announced a significant investment in its Artificial Intelligence (AI) infrastructure, headlined by the introduction of the "Stargate" project. This initiative involves a joint venture between tech giants OpenAI, SoftBank, Oracle, and MGX, aiming to invest a staggering $500 billion over the next four years potentially positioning the U.S. as a leader in AI development. The primary goal is to expand the AI computing infrastructure across the United States, focusing on building new data centers and enhancing computing capacity for current and future AI projects.

 

AI for Data-Driven Businesses in 2025

The immediate financing of $100 billion underscores the criticality and priority placed on Stargate. This investment is not just about hardware; it's also about fostering innovation in AI, with OpenAI specifically aimed at developing Artificial General Intelligence (AGI) defined as an AI system capable of outperforming humans across economically significant tasks. Concurrently, data privacy remains a top concern for individuals with AI set to be expedited in its abilities and ubiquitousness.

 

So, what are the potential AI privacy implications we can expect to see in 2025 as the infrastructure is built?

 

Privacy Issues and Trends

To start, with the expansion of AI capabilities, there will be an unprecedented increase in data collection. This could lead to privacy concerns as more personal data on individuals collected over the years is gathered, stored, and analyzed for AI model training and operation. As a result, building new and scaling existing data centers to handle the increased data storage and the type of sensitive data involved will necessitate more robust IT controls and cybersecurity measures. In short, AI systems thrive on data, and the more data they have, the better they perform. This often tempts businesses to collect more information than required, leading to potential misuse, data leaks, or security breaches. Of importance is that with more data being collected, policies on how long data is retained will be critical, impacting privacy as long-term storage could lead to future misuse of data.

 

Potential Sovereignty and Regulatory Challenges

With the formation of global tech partnerships, there's an interest in where the personal data might reside, which country's laws could apply, and how personal data might be shared across national borders, potentially conflicting with international privacy laws like the General Data Protection Regulation (GDPR) in the European Union (EU) and creating data sovereignty challenges. Additionally, the scale of the Stargate investment might influence or necessitate changes in existing privacy laws or trigger the creation of new regulations to address the unique challenges posed by AI data handling.

 

Transparency and Ethical Uses

With AI systems increasingly becoming a staple in everyday activities, the complexity of managing user consent for data usage will escalate, necessitating innovative frameworks to guarantee transparency into how their data is being used and give users the ability to maintain control over their data. For example, using real-world data for training AI models could lead to issues where individuals' data is used without explicit consent, raising ethical concerns about privacy rights and acceptable use policies.

 

Easily Understood AI Models

As consumers become more tech-savvy, there’s a growing call for "explainable AI" — models that are not only effective but also understandable. This will likely continue to create a push towards better methods for anonymizing data to protect data subject rights while still allowing for beneficial AI development. The effectiveness of these methods, however, will be continuously tested by the advances made in AI whereby it could potentially lead to the re-identification of initially anonymized data. Regardless of the tools and methodologies deployed, the pure concentration of data in the hands of a few large entities involved in the Stargate project could lead to monopolistic practices in data handling, potentially reducing individual data subject privacy rights as these entities could dictate new terms of data use.

 

Final Thoughts

With AI at the forefront of business innovation, we are in an era of unparalleled potential and, unfortunately, unprecedented risks in which the associated privacy concerns cannot be ignored. However, with the ongoing innovations of AI and privacy-leading practices, businesses can adopt strategies and tools that enable their ability to leverage the power of AI responsibly. This includes implementing regular privacy audits to help businesses identify potential risks and mitigate them before they become significant issues, and to assess their privacy compliance routinely against an ever-changing landscape and technologically innovative backdrop.


If you have any questions about how AI-driven data collection and evolving privacy regulations might impact your business, contact Gray Reed Advisory’s Lynn Rohland or Vicky Fang to ensure compliance with emerging data privacy laws and best practices.

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