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AI Procurement Training: Buying AI With Contracts and Evidence That Protect You

Change Control When the Supplier Updates the Model

Quiz: Change Control When the Supplier Updates the Model

Audit Rights, Logging Access and Incident Notification Clauses

Quiz: Audit Rights, Logging Access and Incident Notification Clauses

Sub Processors, Model Hosting and Concentration Risk

Quiz: Sub Processors, Model Hosting and Concentration Risk

Public Sector Rules and Transparency Duties When Buying AI

Quiz: Public Sector Rules and Transparency Duties When Buying AI

Acceptance Testing and Pilot Design That Proves Value

Quiz: Acceptance Testing and Pilot Design That Proves Value

Exit, Portability and Avoiding Lock In to One Model Vendor

Quiz: Exit, Portability and Avoiding Lock In to One Model Vendor

Final exam: AI Procurement Training: Buying AI With Contracts and Evidence That Protect You

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Quiz: Sub Processors, Model Hosting and Concentration Risk

AI Procurement Training: Buying AI With Contracts and Evidence That Protect You
Sub Processors, Model Hosting and Concentration Risk
Quiz: Sub Processors, Model Hosting and Concentration Risk

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Question 1 of 5

1. Question

What is a sub-processor in the context of AI procurement?

A sub-processor is a human employee
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A sub-processor is another vendor that provides components or services to your primary vendor
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Sub-processors do not exist
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Only large vendors use sub-processors
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Question 2 of 5

2. Question

Why is sub-processor disclosure important in contracts?

Sub-processor disclosure is not necessary
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You need to know who handles your data and systems, and you can audit sub-processors for security and compliance
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Sub-processors are always trustworthy
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Disclosure is the vendor's decision only
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Question 3 of 5

3. Question

What is concentration risk?

Concentration risk does not exist in AI procurement
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Dependence on a single vendor for a critical function, where vendor discontinuation or failure affects your business
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Using multiple vendors always eliminates risk
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Concentration only applies to data storage
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Question 4 of 5

4. Question

How can you protect against concentration risk?

Concentration risk cannot be managed
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Ignore the risk and hope the vendor remains viable
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Build redundancy, ensure data portability and diversify across multiple vendors for critical functions
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Accept all concentration risk as unavoidable
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Question 5 of 5

5. Question

In the per-call pricing example, what risk did the customer face?

Pricing always remains stable
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Usage growth caused exponential cost growth, locking the customer into the vendor because switching was too disruptive
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Pricing risks do not exist
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Per-call pricing is always optimal
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