AI companies are now paying tens of thousands of dollars to buy the internal data of shuttered startups, raising major privacy concerns.
Firms like SimpleClosure are helping defunct companies sell off assets, including codebases, Slack messages and email archives to buyers building AI systems, Forbes reports.
CEO Dori Yona says inbound interest from AI companies has been overwhelming, driven by a race for high-quality data to train AI systems.
“There’s a feeling of a gold rush from these companies trying to get their hands on real-world data.”
Yona says SimpleClosure has processed nearly 100 such deals over the past year, recovering more than $1 million for founders. Typical payouts range from $10,000 to $100,000 per company, depending on the depth and usefulness of the data.
A competitor, Sunset, operates a similar model. CEO Brendan Mahony says pricing depends on the company’s size, age, and what he calls “data richness,” which is a measure of internal traceability and cross-platform linkages. Mahony says a Jira ticket tied to a specific code commit carries more value than a standalone document. He highlights that internal communications in certain industries, like healthcare and finance, are commanding a premium.
While SimpleClosure and Sunset are benefiting from a new gold rush, others are seeing serious privacy concerns.
Marc Rotenberg, founder of the Center for AI and Digital Policy, warns that employees are unlikely to have anticipated their internal communications being sold to third parties, and that anonymization does not fully resolve the concern.
“I think the privacy issues here are quite substantial. Employee privacy remains a key concern, particularly because people have become so dependent on these new internal messaging tools like Slack. It’s not generic data. It’s identifiable people.”
Rotenberg’s organization has written to the Senate Commerce Committee calling on the Federal Trade Commission (FTC) to scrutinize the practice.
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