Do I need to disclose OpenAI in my privacy policy?

Yes. OpenAI is a third-party data processor, and you must disclose its use in your privacy policy under GDPR, CCPA, and similar regulations. You must inform users that their inputs are transmitted to OpenAI's servers and explain how their data is used. Failure to disclose AI processing can result in regulatory violations and user trust issues.

What data does OpenAI collect from my users?

OpenAI collects user prompts, conversation history, context, and generated outputs (text or images). If users upload files for fine-tuning or assistants features, those files are also transmitted to OpenAI servers. OpenAI also logs API usage metrics and token counts for billing and service monitoring purposes.

Does OpenAI require a cookie consent banner?

OpenAI itself does not use cookies. However, if your website uses cookies for other purposes (analytics, functionality, marketing), you must disclose all cookie use in your banner. The cookie banner should separately address third-party data processing via OpenAI's API alongside any cookie consent.

Who is the data processor for OpenAI, and where is my data stored?

OpenAI, L.L.C. (United States) is the data processor. User data is transferred to and processed on OpenAI's servers located in the United States. For GDPR compliance, a Data Processing Agreement (DPA) must be in place with OpenAI before transmitting any personal data. Review OpenAI's privacy policy at https://openai.com/privacy/ for current data retention and use terms.

AI & Machine Learning

Privacy policy clauses for OpenAI

OpenAI is an artificial intelligence platform that powers language models (GPT) and image generation tools (DALL-E). Websites integrate OpenAI to enable AI-driven features such as chatbots, content generation, and image creation for their users.

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What data OpenAI collects

Your privacy policy must disclose each of the following data types when you use OpenAI.

User prompts and inputs sent to API

Conversation history and context

Generated text and image outputs

API usage and token counts

File uploads for assistants/fine-tuning

When does OpenAI trigger privacy obligations?

Immediate Data Flow

The moment you integrate OpenAI's API into your product, user prompts and inputs are transmitted to OpenAI's servers in the United States. This is not optional: every API call sends data cross-border. If your users are in the EU, GDPR Article 44 (transfers of personal data) is triggered immediately.

Regulatory Thresholds

GDPR: Applies if any user is in the EU. User prompts may constitute personal data (especially if they contain names, identifiers, or contextual details). You must establish a lawful basis (Article 6) before sending data to OpenAI. Consent is common but not required if you have a contractual or legitimate interest basis.

Common compliance pitfalls

Pitfall 1: Missing or Vague AI Disclosure in Privacy Policy

The mistake: Many founders add OpenAI but describe it generically as "third-party services" or "analytics" without naming the vendor or explaining what data flows. GDPR Article 13 and CCPA Section 1798.100 require specific disclosure of data categories and recipients.

Why it happens: Pressure to ship quickly; underestimating how specific regulators expect the language to be.

Consequence: Regulatory fine or complaint. If audited, regulators will find the privacy policy inadequate. Under GDPR, fines up to €20M or 4% of global revenue. CCPA complaints can lead to statutory damages ($2,500–$7,500 per violation per consumer).

Pitfall 2: No Data Processing Agreement (DPA) with OpenAI

The mistake: Sending EU user data to OpenAI without a signed DPA that includes Standard Contractual Clauses (SCCs). Many founders assume OpenAI's public terms cover this or skip the formal step.

Why it happens: DPAs feel bureaucratic; assumption that "everyone uses OpenAI" so compliance must be handled.

Consequence: GDPR violation of Article 28 (processor agreement requirement) and Article 44–46 (unlawful transfer). Regulators (especially national DPAs like CNIL, ICO) actively investigate OpenAI transfers. Schrems II judgments have heightened scrutiny of US transfers. Enforcement can result in processing bans or fines.

Pitfall 3: Consent Misconfiguration or Absent Consent Banner

The mistake: Assuming consent is automatic or mixing AI usage into a vague "Functional" cookie category instead of obtaining explicit, informed consent before sending data to OpenAI.

Why it happens: Cookie consent managers often don't have an "AI" category; founders lump it with "necessary" or "analytics."

Consequence: Non-compliance with GDPR Article 6 (lawful basis). If consent was the intended basis, any processing without affirmative consent is unlawful. CCPA requires opt-out rights at minimum; failing to provide them is a violation of Section 1798.120.

Privacy policy clauses for OpenAI

What data OpenAI collects

When does OpenAI trigger privacy obligations?

Immediate Data Flow

Regulatory Thresholds

First Concrete Step

Where data goes

Common compliance pitfalls

Pitfall 1: Missing or Vague AI Disclosure in Privacy Policy

Pitfall 2: No Data Processing Agreement (DPA) with OpenAI

Pitfall 3: Consent Misconfiguration or Absent Consent Banner

Legal note

Sample privacy policy clause

What regulators look for

Key Audit Priorities

What They Audit First

Frequently asked questions

Do I need to disclose OpenAI in my privacy policy?

What data does OpenAI collect from my users?

Does OpenAI require a cookie consent banner?

Who is the data processor for OpenAI, and where is my data stored?

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