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Artificial Intelligence

Implications for artificial intelligence and machine learning

The use of artificial intelligence (AI) has been one of the most significant issues in many sectors for some years now, as companies leverage the many opportunities for optimising processes and boosting productivity. AI systems can be deployed in almost every conceivable field, including in the financial sector and in media firms, in recruiting, in the sport and healthcare sector, in the automotive industry and in the energy sector. Alongside the seemingly unlimited opportunities for digital transformation, however, automation of business models and AI-supported decision-making also carry legal risks that companies need to keep in mind.

Our interdisciplinary team has in-depth knowledge and expertise in both the technology and the legal assessments and can assist you in designing and successfully implementing your AI-based and innovative business models.

From a simple chatbot to a self-learning system, AI depends on the quality of the data on which it is based. The benefits of AI to a company should not be detrimental to society. Therefore, AI must avoid discriminatory decisions that automatically disadvantage certain groups of people, for example, just like how humans must. Discriminatory results are often due to an AI system being trained using an inaccurate dataset. Such results can be avoided by incorporating sustainability aspects into corporate strategy, applying human checks and maintaining a high standard of data security and data quality. A sustainable strategy for dealing with AI minimises the risk of legal problems when using it.

Policymakers and legislators have long been aware of the potential benefits of AI for the common good, as well as the risks posed by unregulated or uncontrolled AI. Examples of efforts to manage these include the Digital Strategy of the European Union (EU). In addition to the proposal for an international AI framework convention, the Artificial Intelligence Act (AI Act) is an important pillar of the Digital Strategy at the EU level. The regulation provides for transparency obligations in the case of some AI systems, e.g. chatbots and deepfakes. In accordance with the AI Act, further strict requirements regarding AI, risk management, transparency, monitoring, cyber security and data governance (including in relation to training) apply, graded according to the risk posed by the particular AI system to the rights and interests of individuals and of society as a whole. They may also involve bans on companies. Even companies that only use, rather than create, systems will be subject to special requirements to ensure monitoring and provide information about incidents.

Due to the topic's complexity and its relevance for the future, companies would be well advised to address the numerous legal issues that can result from the use of AI as they relate to their own business model so that they avoid legal problems:

  • What statutory regulations apply to AI now and will do in the future? What is the right way of implementing in-house language models in the company?
  • Who is liable for AI errors and damage caused by AI?
  • How can discrimination by AI be avoided and do automated decisions have to be reviewed by humans?
  • What should be taken into account when using AI for algorithmic management?
  • What employment law aspects should be considered when using AI in a corporate setting? What are the requirements for AI literacy and training in companies?
  • What should be taken into account when using AI in the Internet of Things (IoT), in Industry 4.0 and with AI agents? 
  • Is there a legal obligation to state that AI is being used? 
  • What should be taken into account with regard to the dataset used to train the AI? 
  • What are the cyber security and data protection requirements and, in the case of machine learning, what are the requirements with regard to the quality of the data used to train the AI? What needs to be taken into account under data protection law when processing personal data using AI systems?
  • How does the use of AI affect intellectual property rights? Who is the inventor or originator of an innovation created using AI? How should prompts be judged according to law?
  • What measures can be taken to ensure that trade secrets are protected when AI systems are used? How can AI systems operating in the public cloud be prevented from utilising questions that include trade secrets when generating answers for other users (third parties)?

Using artificial intelligence in a legally compliant way

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  • The artificial intelligence and technology group at CMS in Germany frequently supports a mix of domestic and international clients in ensuring their compliance with newly introduced regulations in the area.

    Chambers Germany, 2026
  • The technology, media and communications team at CMS has in-depth expertise in AI (…). The team's strengths include advising on the development of specific AI models and solutions, keeping clients up to date with regulatory requirements in the wake of changes to AI, data and digital services regulations and tailoring user licence agreements to individual needs.

    Legal 500 Germany, 2026 (sector focus: artificial intelligence)
  • CMS [focuses] on advising on the development, use and marketing of AI products and excels in particular in assessing regulatory frameworks in light of all relevant European legislation, including the Data Act, the AI Act and the Digital Markets Act.

    Legal 500 Germany, 2025 (sector focus: artificial intelligence)
  • With its experience in outsourcing, digitalisation and software projects, but also owing to its presence in relevant trends such as AI, data economy and cybersecurity, the IT and data law practice in Germany is one of the market leaders.

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