Which 90-Day Rocks must leadership teams execute to resolve AI intellectual property and vendor risk prior to an exit?

Question

Tyler Smith · Accepted Answer

Private equity buyers and corporate development teams have introduced strict AI warranties and representations into modern purchase agreements. If your company uses artificial intelligence in code generation, content creation, or customer data processing without airtight legal hygiene, buyers will demand substantial escrow indemnity holdbacks at closing. To prevent this, leadership teams must execute specific AI governance Rocks well before going to market.

First, dedicate a quarterly Rock to an AI Intellectual Property and Vendor Audit. The owner of this Rock, typically the Visionary or operations leader alongside external counsel, must catalog every commercial large language model, API subscription, and automation tool used across the company. The deliverable is a comprehensive register verifying that employee accounts do not allow company or client confidential data to be trained into public model datasets.

Second, execute a quarterly Rock around Customer Contract and Terms of Service Standardization. If your company processes client data using third-party AI models, review and update customer master service agreements (MSAs). The goal of this Rock is to ensure all client contracts include explicit consent for automated data processing while confirming that your business retains ownership of all operational output and derivative work products.

Third, implement an internal Employee AI Acceptable Use Policy Rock, signed by all staff members and logged in company human resources systems. Proving to a prospective buyer that your company enforces clear boundaries regarding code generation, copyright infringement checks, and data privacy turns an area of perceived risk into proof of corporate maturity. Resolving these exposures on your quarterly EOS rhythm ensures clean legal diligence and protects every dollar of your enterprise valuation.