Failed Startups Are Selling Employee Data to AI Companies for Hundreds of Thousands of Dollars
Defunct companies are monetizing their internal communications by selling them to AI labs as training data. Shanna Johnson, CEO of the now-defunct software company Cielo24, sold every Slack message, internal email, and Jira ticket for "hundreds of thousands of dollars."
SimpleClosure, a startup that manages company shutdowns, launched a tool last year allowing failing businesses to sell their internal communication archives to AI companies. The company has processed 100 such deals in the past year, with payouts ranging from $10,000 to $100,000.
Privacy Risks Are Substantial
These transactions raise serious employee privacy concerns. Even anonymized data can contain personally identifiable information-particularly for long-tenured employees whose communication patterns become distinctive.
Marc Rotenberg, founder of the Center for AI and Digital Policy, told Forbes that the privacy issues are "quite substantial." He noted that workplace messaging tools like Slack contain data about identifiable people, not generic information.
Employees themselves are increasingly wary of data collection. A Gallup poll found that ethical opposition and data privacy concerns rank among the top reasons workers avoid using AI tools on the job.
Workplace Data Concerns Extend Beyond AI
Privacy anxiety isn't limited to AI training. A 2024 survey by Checkr found that nearly half of 3,000 respondents would accept a pay cut if it meant their employer wouldn't track their online activity.
For PR and communications professionals, this trend presents a direct challenge. As companies face mounting employee concerns about data use, internal communications strategies need to address how organizational data-especially from failed ventures-may be sold or repurposed.
Understanding these dynamics is essential for protecting your organization's reputation and managing stakeholder trust. Learn how AI impacts PR strategy and corporate communications to better navigate these emerging workplace issues.
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