Questions and answers
Private AI or ChatGPT: what should a business do with client data?
Updated:
The short answer
It depends on the information and on your obligations. Many tasks can use a business plan of an online AI service. When the information is sensitive, such as client files or health and financial records, AI can run on your own computers or in your own cloud account, so the data does not leave your control.
The three main options
| Option | Where the data goes | Suits |
|---|---|---|
| A free or personal AI account | To the AI provider, under consumer terms | Personal use without client information |
| A business plan of an online AI service | To the provider, under business terms and settings you control | Everyday work, where the provider’s terms meet your requirements |
| Private AI on your own computers or cloud account | Stays on systems you control | Sensitive client, patient or financial information |
A business plan and a private setup can both be the right choice. The question is which information each task touches.
What changed in Israel
Israel’s Privacy Protection Law was significantly updated by Amendment 13, in force since August 2025. It tightens the rules on how organizations handle personal information and gives the Privacy Protection Authority broader enforcement powers.
This page is not legal advice. For your specific obligations, ask your lawyer or data protection officer. What we can do is design the system so that the answer to “where does this data go?” is clear and written down.
What private AI means in practice
The AI model runs on a computer in your office, on your own server or in a cloud account that belongs to you. Requests and documents stay inside that environment. Open models that can run this way are now good enough for many office tasks, such as summarising, searching internal documents and drafting replies.
It is not right for everything. A private setup has a running cost and needs someone responsible for it, and the strongest online models still do better on some tasks. We compare both on your examples before recommending either.
Questions to ask before you choose
- Which information will this task touch?
- Who is allowed to see it today?
- Does the AI provider’s contract allow use of your data, and for what?
- Where is the data stored, and for how long?
- Who in your organization is responsible for the system?
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