Short answer: not in a tool running through a commercial API. But that answer depends on how the setup was done, so it is worth knowing what goes where.
This question comes up in almost every conversation about custom software, and it is usually saved for last. It is a fair question: the company's customer list, formulation, cost table or supplier correspondence goes into a tool, and that tool talks to an outside AI service.
Three separate places — do not mix them up
“Where does the data go?” has no single answer, because data can sit in three different places:
- The tool's own database. Your files, the outputs, the records. This lives on your server, or on a server rented in your name.
- The AI service's temporary processing. When the tool needs to make sense of a text, it sends that text to the service and receives an answer. The provider may keep it for a limited time to check for misuse, but does not use it to train the model.
- The model's training data. This is the part people actually worry about: “will my data be used to train the model?”
For the third one, in systems running through a commercial API, the answer is no. The major providers' commercial terms state in writing that data submitted through the API is not used to train their models. The confusion comes from somewhere else: the terms for the same company's free chat interface can be different. When your employee pastes a company contract into a free chat window in a browser, that is not the same as giving the same data to a tool built on a commercial API.
In practice the biggest data risk is not in the software but in the habit: staff pasting sensitive documents into free chat tools. A custom tool reduces that risk, because it gives people an approved way to get the work done.
Who can see a tool's data?
The real question is not “will the AI learn it” but “how many people can see this”. Look for the answer in three places:
- Whose server is it? Does the tool run in your own hosting account, or on the developer's shared server? If your data sits alongside other companies' data, you should know that.
- How long does the developer keep access? Access is needed during setup. Does it continue afterwards, or is it closed?
- Where are the backups? Backups are usually forgotten and often less protected than the main database.
Four clauses to check in the contract
Ask for these four in writing when you take a quote. Asking is not a burden on the other side; a serious developer already has answers ready.
- Which country the server holding your data is in.
- A commitment that data sent to the AI service will not be used for training.
- That the developer's access closes when the work ends, and that any copies are deleted.
- In what format your data is handed back to you if the contract ends.
That last one is the most frequently skipped and the most expensive to skip. Have it written down from the start that if you decide to leave the tool, your data comes back in a readable form — a spreadsheet, a database dump.
The data protection side
If personal data is involved — employee details, customer names, phone numbers — the tool itself is a processing activity. That does not make the software impossible; it only means your privacy notice and your data inventory need to cover this tool too. If data goes to a service abroad, the conditions for that transfer have to be met. These are all solvable, but they get awkward when they are noticed after the setup.
In short
In a properly built tool, your data does not train the model. But “properly built” does not happen by itself: if nobody writes down whose server it is, when access closes and how the data is handed back, a technically correct answer is not enough on its own.
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