AI Sovereignty is Your Alpha: How to Avoid Transferring Your Alpha to a Hosted Model Provider

This post contributes to the agentic software security thread by extending the focus from the internal development and productionization of Security Forge to the external risks and mitigation strategies associated with using hosted AI model providers. It introduces the concept of 'AI Sovereignty' and details contractual and operational best practices to protect proprietary data ('alpha') from being extracted or misused by third-party providers. Key contributions include detailed guidance on securing Zero Data Retention (ZDR), restricting data usage by providers, ensuring sufficient liability caps, and managing ZDR-ineligible services, beta features, and prompt caching configurations. It also highlights the importance of vetting specific terms for different platforms and models, and the need for operational processes to track and permit only services covered by contractual protections.