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AI Third-Party Risk Management
AI often arrives through software that procurement has
already approved.
AI third-party risk management, or AI TPRM, adds the
existing AI capability and its organizational use to the
current vendor process. It connects due diligence, contracts, controls, owners, and reassessment as the product changes.
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AI Is Already Inside Business Software
Document tools, office suites, meeting platforms, HR systems, CRM software, development tools, and other applications increasingly include assistants, agents, summarization, generation, classification, recommendations, and automated decisions.
These capabilities may arrive through a software update rather than a new procurement decision. The original review of an application may not cover its current AI features, models, data terms, connectors, or settings.
An application inventory is therefore not the same as an AI inventory. Organizations need to know which AI capability is available, how it is used, which data and systems it can access, who owns the decision, and which controls apply.
76%
of products in an April 2026 review of Validaitor's curated enterprise-software library
contained detected AI features.
The library is curated toward enterprise business software. Detection is based on source-linked vendor product, security, and data-handling documentation. The percentage is not an estimate for all software.
AI-Specific Due Diligence
Review area
Information required
Use and impact
Intended task, users, people affected, decisions supported, and the effect of an incorrect or unsuitable output.
Data handling
Inputs, retention, processing location, vendor and subprocessor access, reuse for training or improvement, and deletion.
Model and fourth-party supply chain
Model, API, and hosting providers; relevant dependencies; model version; continuity; and how changes are communicated.
Access and autonomy
Repositories, connectors, permissions, available actions, approval gates, and whether actions can be reversed.
Performance and oversight
Known limitations, testing, output checks, monitoring, human oversight, and escalation procedures.
Legal position and evidence
Intended purpose, provider instructions, applicable classification, restricted uses, logs, test results, version history, and incident routes.
The product name does not determine the decision. A document assistant used to summarize a public report requires different controls from the same assistant processing employee files or supporting recruitment decisions.
When an organization uses a vendor's AI system under its authority, it is generally the deployer under the EU AI Act, while the vendor is generally the provider. The applicable obligations depend on the capability and use rather than the procurement category alone.
AI TPRM Across the Vendor Lifecycle
Existing security, privacy, financial, and operational reviews remain the foundation. AI adds information and decisions at each stage.
Identify.
Record the vendor, application, AI capability, proposed use, account type, and business owner.
Triage.
Assess the data, system access, people affected, role of the output, and potential impact.
Review.
Perform proportionate AI-specific due diligence and collect current vendor evidence.
Decide and control.
Approve, restrict, or reject the use, then assign the required contractual, technical, and organizational controls.
Monitor.
Track material product changes, incidents, control performance, and changes in organizational use.
Reassess or offboard.
Update the decision when the facts change and retain the evidence behind it.
The depth of review should match the exposure.
A drafting assistant using public material does not need the same controls as an AI capability that processes employee data, accesses business systems, or supports a consequential decision.
Ownership and Decision Rights
AI TPRM needs shared evidence and explicit decision rights. The TPRM function can coordinate the process without owning every underlying risk.
OWNER
PRIMARY RESPONSIBILITY
TPRM
Coordinate triage, evidence collection, review status, reassessment, and the overall vendor record.
Business owner
Define the intended use, affected process, expected benefit, acceptable limitations, and operational oversight.
Procurement and legal
Negotiate AI-specific restrictions, change notice, commercial terms, and responsibility allocation.
Security, privacy, and AI governance
Assess data flows, system access, technical controls, legal classification, policy alignment, and required evidence.
IT or application owner
Configure licences, accounts, connectors, permissions, default settings, and technical restrictions.
The record should name who approves the use, implements each control, accepts the remaining exposure, and responds when the vendor or use changes.
How Validaitor Supports AI TPRM
Validaitor helps organizations identify AI in third-party software, collect source-linked vendor evidence, connect capabilities to organizational uses, assign risks and controls, route work to accountable owners, and monitor relevant changes. This keeps the third-party AI record current across the vendor lifecycle.
For a review of the AI capabilities available across your software estate, talk to us.
Start today and turn regulation into a Competitive Advantage.
Contracts and Organizational Controls
The contract should reflect the facts established during due diligence and provide a way to keep them current. Depending on the use and exposure, relevant terms may cover:
permitted and prohibited uses of customer data;
retention, deletion, processing location, and subprocessors;
use of inputs or outputs for model training or product improvement;
notice of material changes to capabilities, models, providers, terms, or default settings;
notification of security incidents, material service failures, and relevant regulatory enquiries;
access to current documentation, instructions, logs, test results, and audit or assurance evidence; and
responsibility allocation, remediation, suspension, continuity, and offboarding support.
Vendor commitments are only one part of the control set. Managed accounts, configuration, least-privilege access, connector restrictions, output checks, employee guidance, and technical guardrails govern how the organization uses the capability.
Aligning with international standards like ISO/IEC 42001 and ISO/IEC 42005 can help organizations implement these requirements systematically. It supports structured risk management, governance, transparency, and continuous improvement—essential elements of sustainable compliance.
Using ISO/IEC 42001 and ISO/IEC 42005 doesn’t guarantee compliance but helps you operationalize obligations at scale, demonstrate due diligence, and prepare for audits or conformity assessments more effectively.