Topic
Third-Party Risk
Third-party risk refers to the potential threats and compliance challenges that arise when organizations rely on external vendors, contractors, contractors, or service providers to handle data, systems, or AI models. In AI governance, managing third-party risk is critical because external vendors may have inconsistent security standards, unclear data handling practices, or inadequate AI safety measures that could compromise an organization's compliance posture and regulatory obligations. Enterprises must assess vendor AI capabilities, contractual protections, audit rights, and cybersecurity practices to mitigate exposure to liability, data breaches, and regulatory penalties stemming from third-party AI systems or negligence.
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