Is your NDA protecting you? (And others?)

professional profile

December 22, 2025

by a professional from University of Southern California - Marshall School of Business in North Palm Beach, FL, USA

I have not seen any NDA, shared with me by people wanting to buy or sell a SMB, which they intended to use with a business broker or someone else, that adequately handled these two topics: Mutuality Protection Usage/Prohibition of A.I. Did you know? Some virtual data room (VDR) providers are now flagging when deal teams bulk-download data rooms into public AI tools. This is the new red flag in due diligence. If you're a buyer, your team's AI use could spook a seller. If you're a seller, you need to demand your data room provider has AI detection turned on. Are you compliant with best practices with respect to how you manage confidential information; yours and other's? Please share your perspective or advice in a comment.
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Reply by a searcher
from University of South Carolina in Savannah, GA, USA
AI risk in diligence is no longer theoretical, but virtual data room “AI detection” features can create a false sense of security for sellers. The real risk begins after the data is downloaded. The best approach isn’t blanket bans but clear NDA language that prohibits using seller data in public or uncontrolled AI tools, supported by consistent internal enforcement. Buyers who lack AI governance for their deal teams are introducing avoidable trust issues and slowing transactions that don’t need to be delayed.
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Reply by an intermediary
from University of Wisconsin Oshkosh in Milwaukee, WI, USA
Luke....thank you for the tag and Happy Holidays to all of the Searchers. I need to thank Ted for the great insight on this topic. It is very important and timely and certainly something that needs to be addressed going forward.
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