AI Vendor Risk Management: How to Assess Third-Party AI Providers
Enterprise AI adoption is increasingly dependent on third-party providers. Organizations are using external LLMs, AI SaaS platforms, AI copilots, AI APIs, AI agents, RAG platforms, vector databases, and AI development tools to accelerate business operations. But every external AI provider introduces another layer of risk. The important question is not simply whether an AI vendor is secure. It is: What data does the vendor receive, how is that data processed, who can access it, what systems can the AI connect to, and what happens if something goes wrong? Traditional third-party risk assessments remain important, but AI vendors require additional scrutiny. Why AI Vendors Need Specialized Risk Assessment An AI provider may process much more than structured business information. It may receive: Prompts AI-generated responses Uploaded documents Source code Customer information Employee information Business strategies Financial information Information retrieved through enterprise connec...