The company assumes greater direct accountability: Which risk best answers this?
Owning the whole model concentrates accountability and liability on the company, with no provider to share it.
The question
A company chooses to build, train and deploy its own proprietary AI model rather than license a third-party API, seeking full control and differentiation. The board asks which downside is uniquely amplified by this build-it-yourself choice, given the company will have no external provider to share responsibility with. Which risk best answers this?
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- The company faces vendor lock-in, becoming dependent on a single external supplier whose pricing, roadmap and support terms it cannot control.Almost right but inverted: vendor lock-in is a risk of relying on a third party, which is precisely what building in-house avoids.
- The company loses control over update timing, since an external provider may change or deprecate the model without its consent.Almost right but inverted: uncontrolled updates are a third-party risk, whereas owning the model gives the company control over its lifecycle.
- The company cannot fine-tune or customize behavior, because the underlying model weights remain closed and inaccessible to it.Plausible but wrong: inability to customize characterizes a closed third-party model, not a proprietary model the company itself owns.
- The company assumes greater direct accountability and liability, owning full responsibility for the model's outputs, safety and compliance. ✓Correct: building its own model means no provider shares the burden, so the company bears heightened accountability and liability for outcomes.
The trap
Selecting classic third-party procurement risks that in-house building actually eliminates. How to remember it
Owning the whole model concentrates accountability and liability on the company, with no provider to share it.
How many of these would you get right?
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Every answer, right and wrong, comes with its own explanation.