Artificial intelligence (AI) is software. Therefore, good AI product contracts address the same relationships and requirements as traditional software contracts. Similar to traditional software contracts, AI product contracts include ambiguous terms of use, unique termination clauses, intellectual property ownership, and ongoing programming support. These issues for both traditional and AI software agreements can lead to unexpected costs, legal disputes, and operational disruptions. However, significant differences between traditional software contracts and AI contracts can be found in contract clauses related to algorithms.
Algorithms are sets of instructions that, when implemented correctly, accomplish a task. A non-computer example of an algorithm is a baking recipe. For example, a cupcake recipe is a replicable set of steps for making cupcakes from scratch. Both baking recipes and computer algorithms have inputs, which contain all the items needed to perform a task, and a series of steps needed to prepare a specific output.