Artificial Intelligence and GDPR Compliance: Essential Steps for Businesses Using AI

The Rise of Artificial Intelligence and GDPR Compliance

The growing accessibility of artificial intelligence (AI) presents substantial opportunities for business growth. However, ensuring compliance with regulations, particularly the EU’s Artificial Intelligence Act and the General Data Protection Regulation (GDPR), is critical. Personal data forms a core component of AI, which depends on high-quality, abundant data to train models and improve decision-making. Additional personal data is frequently collected during AI deployment to tailor outputs to individuals.

This article is the final part of a five-episode series examining GDPR compliance throughout the AI development life cycle and its practical use. Previous episodes are available on the WilmerHale Privacy and Cybersecurity Law Blog.

Data Protection by Design

GDPR compliance must be integrated from the earliest stages of AI development. The regulation requires “data protection by design” (Article 25 GDPR), compelling businesses to implement appropriate technical and organizational measures. These may include pseudonymization and data minimization, applied both when deciding how to process data and during processing itself. Embedding these safeguards protects individuals’ rights and ensures compliance throughout AI operations.

GDPR Compliance When Using AI

The GDPR applies not only to AI developers but also to organizations using AI. This article focuses on entities acting as data controllers—those who determine why and how personal data is processed. For example, a company using an AI large language model to analyze employee records or generate content containing personal data qualifies as a controller.

Joint Controllership or Controller-Processor Arrangement

If both the AI developer and the user jointly decide the purpose and methods of processing, they become joint controllers and must formalize their responsibilities through an agreement. More commonly, the AI developer acts as a processor, handling personal data on behalf of the user (controller). In this case, a controller-processor agreement is required, covering details such as the processing purpose, data types, duration, and obligations of both parties.

Joint Controllership Arrangement

In practice, AI developers rarely qualify as joint controllers because they seldom share decision-making authority over processing purposes.

Controller-Processor Agreement

Most AI developers process data as service providers, especially in software-as-a-service models. Companies using such AI must ensure a signed controller-processor agreement is in place and verify that the processor implements technical and organizational measures that guarantee GDPR compliance—this includes adequate security and safeguards for international data transfers outside the EU.

Data Input

Organizations must exercise care when inputting personal data into AI systems to maintain GDPR compliance. Key considerations include:

• Internal Awareness and Training: Employees involved in AI use must receive thorough GDPR training to understand obligations and risks.
• Purpose Limitation: Clearly define and adhere to specific purposes for processing personal data. Avoid using AI for any purposes outside approved company policies.
• Data Minimization: Limit personal data inputs to what is strictly necessary. Where possible, use anonymized data. Be cautious with free, publicly accessible large language models, as any data provided typically becomes accessible to the model’s developer. Companies might restrict or prohibit entering personal data into such tools.

Data Output

Companies must also manage AI-generated outputs carefully. Any personal data produced or derived from AI should be verified for accuracy to mitigate errors and biases. Transparency is essential—organizations should inform customers and stakeholders about their AI use, including how personal data is processed and for what purposes.

For AI systems that make automated individual decisions, the GDPR requires providing individuals with clear, concise information about how their data is used and how decisions are made.

Individuals’ Rights

Respecting data subject rights is fundamental. Companies must enable individuals to access, correct, object to, or request erasure of their personal data as permitted by law. Before deploying AI systems, organizations should ensure they operate safely and establish procedures to notify authorities and affected individuals in case of data breaches or other incidents—for example, if AI chatbot conversation logs containing personal data become exposed through a security lapse.

For more on AI and GDPR compliance, explore trusted resources or consult specialized training programs, such as those available at Complete AI Training.