Most AI Vendors Hide Data Sharing From Contracts

A new DataGrail report analyzing 2,400 business software providers found that 63.6% of vendors advertising AI capabilities fail to disclose third-party AI subprocessors in their legal documentation. This means companies may be unknowingly exposing customer data to AI models they never approved. The findings undermine trust in data processing agreements, the standard contracts used to evaluate vendor data handling. DataGrail CEO Daniel Barber warns that AI technology is advancing faster than governance frameworks can keep pace.