Privacy Policy for an AI Product

AI products have all the same legal requirements as any other software — plus a few extra layers that most standard privacy policy templates don't cover.

If your product uses AI in any meaningful way, here's what your privacy policy needs to address that a standard template won't.

What makes AI products different from a privacy perspective

1. Training data

Does your AI learn from user inputs? Does it improve over time based on how people use it?

If users type a question and your AI uses that input to improve its model, that's a form of data processing that needs to be disclosed. Users have a right to know whether their inputs are being used to train your system.

Your privacy policy needs to state:

• Whether user inputs are used for training
• Whether inputs are stored, and for how long
• Whether inputs are anonymised before training
• How users can opt out

2. Third-party AI providers

Most AI products don't run their own models — they call the OpenAI API, Anthropic's Claude, Google Gemini, or similar. That means user data is being sent to a third-party processor.

This needs to be disclosed in your privacy policy under "third parties we share data with." It's not optional. Under GDPR, users have a right to know which companies process their personal data.

3. AI-generated outputs and accuracy

This isn't a privacy issue strictly speaking, but it's closely related — and many AI products address it in their privacy policy or a linked disclaimer.

If your AI generates information that could affect health, legal, or financial decisions, you need to:

• Clearly disclaim that outputs may be inaccurate
• State that users should verify information before acting on it
• Not represent the AI as a professional adviser

A separate AI disclaimer document handles this more thoroughly, but your privacy policy should at minimum note that AI-generated outputs are not guaranteed to be accurate.

4. Data retention for AI context

Some AI products store conversation history to provide context in future sessions. This is useful for users but creates additional data retention obligations.

Your privacy policy needs to state:

• How long conversation history is stored
• Whether users can delete their history
• Whether history is used to personalise future responses

5. Children and AI

AI products that could be used by children have stricter rules. If your product isn't age-gated, you need to state that it's not intended for users under 13 (or 16 in some EU countries) and that you don't knowingly collect data from children.

The documents an AI product typically needs

• Privacy Policy — covering all the above
• Terms and Conditions — including AI-specific usage restrictions
• AI Product Disclaimer — accuracy, limitations, no professional advice
• EULA (if distributing software) — licence terms for the AI tool

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