Know where the data comes from An AI derives its value from data sets used to train the AI. A common phrase in the AI industry is “garbage in, garbage out” – meaning, an AI is only as good as the data that has been used in its training. Canada regulates the commercial use of personal information through the Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA requires consent of individuals before a company collects, uses or discloses their personal information during commercial activities.

Where the AI has been trained using personal information or uses this data in the course of its operation, PIPEDA requirements will be triggered. As such, during the due diligence process, the buyer must be wary of the consents the target has received from its customers. Often, these will be included in the standard terms of use on which the target engages its customers.