Who Is Legally Responsible For AI Decisions In Business?

(MENAFN- Khaleej Times) In the UAE, artificial intelligence is no longer an experiment. It has become part of everyday business practice. Companies use AI to analyse data, assess risk, automate customer service and even draft documents. The country is investing heavily in its digital future, and businesses are moving in the same direction.

But as opportunities expand, so does responsibility.

One of the most common misconceptions is the belief that if a system makes a decision, it should also bear the responsibility. In practice, this is not the case. An algorithm is not a legal person. It cannot be held accountable. Responsibility always rests with the company that deploys and relies on the system.

If AI recommends a loan, denies an insurance claim or influences a hiring decision, regulators will ask straightforward questions: What control measures were in place? Who reviewed the system? Were oversight mechanisms established?

Courts are not concerned with how“intelligent” the software was. They are concerned with how responsibly the business acted.

Automation is not intelligence

Another challenge lies in terminology. Many companies label any digital system as AI. But there is a clear difference between simple automation and machine learning.

A system that follows predefined rules is predictable.

A system that learns from data and adapts its outputs is not.

This is where questions of transparency and explainability arise. If a customer is denied a service, the company must be able to explain why. When a learning model makes the decision, that explanation may be more difficult. And that increases regulatory risk.

Misclassifying technology may seem minor. In reality, it affects contracts, insurance coverage, risk assessments and relationships with regulators.

Data governance is not optional

AI does not operate in a vacuum. It is built on data - often personal data.

Businesses must therefore understand:

• where data is stored

• who has access to it

• under what conditions it is shared with third parties

• whether clients have provided informed consent for such processing

Using cloud services does not remove responsibility. If data is mishandled, the company - not the infrastructure provider - will be accountable.

Cross-border data transfers remain particularly sensitive. In a global digital economy, information moves easily across borders. Legal obligations do not.

Investors are watching

At an early stage, legal considerations are often postponed. Start-ups focus on product development and scaling.

However, governance gaps tend to surface when companies seek external investment. Investors increasingly evaluate not only the technology itself, but also internal control systems, data protection policies and the allocation of responsibility.

A well-structured legal framework is not bureaucracy. It is the foundation for sustainable growth.

The bottom line

Artificial intelligence is not only about technology. It is about trust.

Customers must understand how decisions are made. Regulators must see that processes are controlled. Investors must be confident in the resilience of the business model.

AI can accelerate business. But it does not eliminate obligations.

In the end, what matters is not what a system can do. What matters is who stands behind it - and whether they are prepared to take responsibility for its decisions.

Technology moves fast. Responsibility must move with it.

-p

The writer is the CEO of Alphabiz.

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