Why South African companies must adopt closed AI to safeguard data and stay ahead of regulations

SOUTH African companies are currently in a position of having to decide whether to adopt open or closed artificial intelligence (AI) systems, a decision that goes beyond price or technical merit and includes regulatory considerations.

- AKHONA NKALITSHANE

SOUTH African companies are currently in a position of having to decide whether to adopt open or closed artificial intelligence (AI) systems, says the author. AI LAB

The risks of choosing the wrong solution are serious.

One of the biggest dangers lies in how open AI platforms handle proprietary data. Many companies opt for AI for speed and efficiency, but few stop to consider whether their implementation creates hidden risks to their most valuable asset: intellectual property.

Open AI platforms promise convenience and low costs, yet every upload of proprietary data feeds an opaque system that could be repurposed, resold, or turned against you. In trust-critical sectors like finance, healthcare, legal, and infrastructure, this isn't just compliance - it's a strategic threat to security and long-term resilience.

Data is not just an IT asset; it is arguably the most valuable currency an organisation holds. And when that data leaks, the cost is not measured in IT spend; it's measured in ransom payments, regulatory fines, and irreparable reputational damage. The irony is shocking - businesses save money by using free or open AI platforms, but those "savings" are dwarfed the moment a breach occurs.

The math is simple: you cannot protect what you do not own, and you cannot control what you outsource.