AI in short: The essentials

Contributors: Liz Blythe, Louise Taylor and Jessie Williams

In June, the Five Eyes intelligence alliance issued a rare public warning. In short: "the cyber threat from frontier AI is coming in months, not years. Act now". Just weeks later, an Open AI model broke out of its sandbox, accessed the open internet and hacked a real company, just to cheat on the test it was taking. Five Eyes said "months, not years". But the reality arrived in weeks.

So, what should businesses do? Well, the answer isn't futuristic. It's basic security hygiene, done faster. Three things matter most:

• First, know where your sensitive data goes. Every path it takes in, through, and out of your business, and which of those paths you're actually monitoring. The answer may be less coverage than you think.
• Second, fix your access controls. Who can reach what, and how are you verifying they are who they claim to be? Most of these AI-related incidents aren't evil robots. They're ordinary systems accessing data they simply shouldn't have access to.
• Third, test your response for real. Not a document. A live drill.

Five Eyes was blunt: breaches will happen. The only question is how fast you catch them and respond.

And don't forget your supply chain – are your suppliers engaging in the same security hygiene as well? It's time to check. The threat may sound like science fiction. But the defence is surprisingly ordinary.

Contributors: Liz Blythe, Will Irving

Here's a question that didn't exist three years ago: If you paste confidential client information into a public AI tool, is it still privileged? Recent court decisions suggest the answer is no.

In the U.S. Heppner case, a corporate executive entered details of his situation into a public AI chatbot to work out his legal exposure. When authorities later seized his computer, he claimed privilege. But the Courts disagreed. Why? Because an AI chatbot isn't a lawyer. Also, privilege can be waived if confidentiality is lost. Based on the terms of access, public AI chatbots owe you no duty of confidence. Confidentiality gone. Privilege gone.

In the UK Munir case, the Upper Tribunal went even further, finding that uploading confidential documents into an open, public AI tool effectively placed them in the public domain. Confidentiality lost. Privilege waived.

So, what about New Zealand? Well, we haven't had our own Heppner or Munir case yet, but we don't actually need one to know the answer.

As a matter of New Zealand law, legal advice privilege protects confidential communications between a client and a lawyer made for the purpose of obtaining or giving legal advice. It barely needs to be said that a public AI chatbot is not a lawyer because privilege can be waived if confidentiality is not protected. The same rules apply here as in the Heppner and Munir cases. The New Zealand Courts and the Law Society have issued guidance on using AI. In short, don't put confidential, privileged or suppressed information into a public AI tool. 

So, the lesson is simple. Use the tools but be sure to keep sensitive information out of the public ones.