AI is transforming the way businesses work, but using AI tools comes with a big question: How do you protect your data while interacting with AI?

Many AI models process sensitive business information—customer records, financial documents, proprietary research—so keeping that data secure is critical.

Here are five best practices to keep your data protected while using AI.

1. Anonymize Sensitive Information Before Feeding It to AI

Before sending data to an AI model, remove or replace personally identifiable information (PII) so that sensitive details aren’t exposed.

✅ Manual anonymization – Manually replace names, addresses, and other sensitive details before processing data.

✅ Automated anonymization – Use an AI-powered PII Anonymizer to replace PII with structured placeholders while keeping the data useful.

For example:

📌 "John Doe" → "Employee #1"
📌 "555-123-4567" → "Phone #1"

🚫 Avoid: Sending raw customer or company data directly into AI models, especially third-party cloud-based ones.

2. Know What Data You Can Safely Use

Not all data requires strict protection. Publicly available, non-sensitive information can often be used with AI safely.

✅ Use AI for: Market research, trend analysis, or any dataset that doesn’t contain PII or proprietary business intelligence.

🚫 Avoid: Feeding AI internal company emails, legal documents, customer lists, or sensitive financial records unless anonymized.

3. Host Your Own AI Model Instead of Using Cloud-Based Services

Public AI models (like ChatGPT or Gemini) process data on external servers, which means your data is stored or logged elsewhere. To maintain full control, run AI on your own infrastructure.

✅ Run AI models locally – Use open-source frameworks like Ollama to deploy models on your own machines or private cloud servers.

✅ Host AI on secure cloud platforms – If running locally isn’t feasible, use AWS, Google Cloud, or Azure to deploy your own LLM instance.

🚫 Avoid: Relying on public AI APIs for sensitive data processing without understanding how they handle and store inputs.

4. Use Local AI Models for Maximum Data Privacy

If you don’t want your data leaving your network, run AI models locally on your own hardware. This eliminates cloud risks and keeps everything in-house.

✅ Tools to run local models:

LM Studio – A desktop app that lets you run AI models offline.
Ollama – A simple way to deploy AI models on your own servers.
Private LLM instances – Fine-tune AI models within your secure environment.

🚫 Avoid: Processing confidential business data with AI models that require internet access unless you control the hosting environment.

5. Encrypt & Control Data Access in AI Workflows

Even if you’re running AI locally, securing the data before and after it interacts with the model is crucial.

✅ Encrypt data before processing – Use encryption to protect sensitive data at rest and in transit.

✅ Limit AI model access – Ensure that only authorized users can feed data into your AI system.

✅ Monitor AI interactions – Keep logs of what data is processed to detect any anomalies.

🚫 Avoid: Allowing unrestricted access to AI models that handle business-critical or regulated data.

Final Thoughts: AI Security Is About Control

The key to using AI safely is controlling where and how your data is processed.

Anonymize sensitive information before sending it to AI.
Use only necessary data and avoid sharing PII unnecessarily.
Run AI locally or on a private server instead of relying on third-party models.
Ensure strong encryption and access control over your AI workflows.

With the right approach, AI can be a powerful tool for business without compromising security.

➡️ Try the PII Anonymizer today to protect your data while using AI.

5 Best Ways to Protect Your Data When Using AI