And I pay for it literally. You should know this if you use AI-generated content for business purposes.

The Common Assumption

Most developers and businesses assume that:

  • AI-generated content is free to use
  • You own what AI creates for you
  • There are no licensing restrictions
  • It’s safe to use commercially

This is incorrect.

AI-generated content raises complex copyright questions:

  1. Who owns AI output?

    • The AI company?
    • The user who prompted it?
    • No one (public domain)?

  2. Is AI output copyrightable?

    • In many jurisdictions, works created by non-humans aren’t copyrightable
    • This means AI output might be in the public domain
    • But this varies by country and is still being litigated

Terms of Service

Most AI services have specific terms:

OpenAI (ChatGPT, DALL-E):

  • You own the output
  • But you’re responsible for ensuring it doesn’t infringe on others’ rights
  • You can’t use output to train competing models

Midjourney:

  • You own the output if you’re a paid subscriber
  • Free users have limited commercial rights

Stable Diffusion:

  • Open source model
  • But training data may have copyright issues

Google (Gemini):

  • You own the output
  • But subject to Google’s terms of service

The Hidden Costs

Using AI-generated content commercially can expose you to:

  • Copyright infringement: If AI output resembles copyrighted material
  • Trademark issues: If AI generates trademarked names/logos
  • Right of publicity: If AI generates recognizable people
  • Data privacy: If AI output contains personal information

2. Quality and Liability

  • Inaccurate information: You’re liable for AI mistakes
  • Bias and discrimination: AI can perpetuate harmful biases
  • Security vulnerabilities: AI-generated code may have security issues

3. Compliance Costs

You may need:

  • Legal review of AI-generated content
  • Compliance with industry regulations (GDPR, HIPAA, etc.)
  • Insurance for AI-related risks
  • Documentation and audit trails

Real-World Scenarios

Scenario 1: Marketing Content

Problem: You use ChatGPT to generate marketing copy for your website.

Risks:

  • Copyright infringement if output resembles existing content
  • Trademark issues if AI uses protected terms
  • False advertising if AI makes unsubstantiated claims

Solution:

  • Review all AI-generated content
  • Fact-check claims
  • Ensure originality
  • Consider legal review for high-stakes content

Scenario 2: Code Generation

Problem: You use GitHub Copilot or ChatGPT to write code.

Risks:

  • Code may be copied from open-source projects with restrictive licenses
  • Security vulnerabilities in generated code
  • Patent infringement if code implements patented algorithms

Solution:

  • Review all generated code
  • Run security scans
  • Check for license compatibility
  • Document AI assistance in code comments

Scenario 3: Images and Media

Problem: You use DALL-E or Midjourney to create images for your product.

Risks:

  • Output may resemble copyrighted artwork
  • Trademark issues with logos or brand elements
  • Right of publicity if people are recognizable

Solution:

  • Review images for similarity to existing works
  • Check for trademark conflicts
  • Consider licensing stock images instead
  • Get legal review for commercial use

Best Practices

1. Read the Terms of Service

Always read and understand:

  • What rights you have to the output
  • What restrictions apply
  • What liabilities you assume
  • How the service can use your inputs

2. Implement Review Processes

  • Human review: Never use AI output without human oversight
  • Legal review: For high-stakes content, get legal input
  • Quality checks: Verify accuracy and appropriateness
  • Originality checks: Ensure content doesn’t infringe

3. Document Everything

Keep records of:

  • What AI tools you used
  • What prompts you provided
  • What output you received
  • How you reviewed and modified it
  • When and where you used it

4. Consider Alternatives

Sometimes it’s better to:

  • Hire human creators
  • Use licensed stock content
  • Create original content yourself
  • Use AI for inspiration, not final output

5. Get Insurance

Consider:

  • Professional liability insurance
  • Errors and omissions coverage
  • Cyber liability insurance
  • AI-specific coverage (if available)

The Regulatory Landscape

Laws are evolving:

  • EU AI Act: Regulates AI use in Europe
  • US Executive Order: Sets AI safety standards
  • China’s AI Regulations: Strict rules on AI-generated content
  • Copyright Office: Clarifying AI copyright issues

Stay informed about:

  • New regulations in your jurisdiction
  • Court decisions on AI copyright
  • Industry-specific requirements
  • Best practices from legal experts

What You Should Do Now

Immediate Actions

  1. Audit your AI usage: What AI tools are you using?
  2. Review terms of service: What are your rights and obligations?
  3. Assess risks: What could go wrong?
  4. Implement safeguards: How can you reduce risk?

Long-Term Strategy

  1. Develop policies: Create guidelines for AI use
  2. Train your team: Educate on legal and ethical considerations
  3. Monitor changes: Stay updated on legal developments
  4. Consult experts: Get legal advice when needed

Conclusion

AI-generated content isn’t free—it comes with:

  • Legal risks
  • Compliance costs
  • Quality concerns
  • Liability exposure

The cost isn’t just monetary; it’s also:

  • Time for review and compliance
  • Risk of legal issues
  • Potential damage to your reputation
  • Lost opportunities from overly cautious use

The key is informed, responsible use. Understand the risks, implement safeguards, and use AI as a tool to enhance—not replace—human judgment and creativity.

Don’t learn this lesson the hard way. Start protecting yourself and your business today.