The True Cost of "Free" AI
Why that $20/month subscription might be costing your firm $200,000.
The Hidden Costs of Public AI
It starts innocently enough. A paralegal pastes a confidential merger agreement into a public AI tool to summarize the key terms. A research scientist uploads clinical trial data to get a quick analysis. A consultant feeds proprietary client strategy documents to generate a presentation outline.
Each of these actions exposes your organization to a chain of risks that most CTOs dramatically underestimate:
The Risk Math
Annual Cost of Data Leakage Risk
The Training Data Problem
Most public AI providers explicitly state that user inputs may be used to improve their models. Even those offering "enterprise" tiers with opt-outs have complex data processing agreements that most legal teams haven't fully reviewed. When your employees use these tools, your proprietary data becomes part of a training corpus that could surface in responses to your competitors.
The Compliance Nightmare
For regulated industries — legal, healthcare, financial services — the compliance implications are severe. HIPAA doesn't care that your employee "only uploaded a summary." If Protected Health Information entered a non-BAA-covered system, that's a reportable breach. Period.
The same applies to GDPR (personal data processing), CCPA (consumer data), and industry-specific regulations like FINRA (financial services) and ITAR (defense).
The Alternative: Private Deployment
A private AI deployment eliminates these risks entirely. Your data stays in your infrastructure. No third-party API calls. No training on your data. Full audit trail. And the one-time cost of deploying a private system is typically less than the annual compliance risk exposure of using public tools.
The question isn't whether you can afford a private AI deployment. The question is whether you can afford not to have one.