The use of artificial intelligence (AI) in construction is expanding rapidly, offering substantial efficiencies in estimating, scheduling, design support, and document management. However, even setting aside well‑known concerns such as hallucinations or flawed analysis, AI creates significant legal and business risks. Three areas deserve particular attention: (1) unintentional disclosure of confidential or proprietary information, (2) antitrust exposure in the bidding process—including AI‑enabled bid rigging, and (3) copyright violations arising from improper use of design documents subject to license restrictions.
Risks to confidential and proprietary information
AI platforms utilize large datasets and user‑submitted information and may rely on that data to create their operational logic. Depending on the platform, material uploaded by a user such as pricing spreadsheets, internal production rates, subcontractor quotes, or owner‑restricted plans may be stored and used for future model training. Uploading such information into an AI system can breach contractual confidentiality obligations, violate NDAs, or unintentionally expose trade secrets.
For example, an estimator who uploads a proprietary labor‑productivity model to generate a cost narrative may unknowingly make that logic available for future users of that AI platform, potentially benefiting competitors who use the same platform. Similarly, uploading owner‑provided geotechnical reports or building information modeling (BIM) files into an AI tool may itself violate confidentiality restrictions, even if the information never becomes public.
Antitrust risks and AI‑enabled bid rigging
AI also introduces meaningful antitrust concerns in procurement. When pricing or market intelligence is uploaded into an AI platform that draws on data from other users, the system may generate outputs based on a common pricing algorithm. This can unintentionally align competitors’ bids and diminish competitive variation, an outcome regulators increasingly view as potentially unlawful. The use of AI may produce:
- Shared cost recommendations: Multiple contractors use the same AI tool for estimating, and the platform, trained on aggregated user inputs, begins generating remarkably similar unit prices or markups.
- Predictive strategy alignment: AI analyzes market conditions and competitor behavior, then suggests “optimal” bid prices designed to avoid aggressive undercutting.
- Normalization of labor or equipment rates: An AI model trained on industrywide inputs recommends standardized rates, eliminating natural differences among bidders.
By doing any of the above, AI can facilitate algorithmic bid rigging, even absent intentional coordination.
Copyright and license violations
Architects and engineers typically retain copyright ownership of their design documents, and standard form agreements include a limited license that only allows the documents to be used for the construction of a specific project. Uploading plans, specifications, or BIM models into an AI platform—especially one capable of generating derivative outputs such as alternative design options, cost modeling, or constructability recommendations—likely exceeds the use permitted under the license. Further, if the AI platform repurposes or transforms those documents, it may create unauthorized derivative works and expose contractors or owners to claims of copyright infringement.
In summary, while AI can add real value, construction companies should adopt strict protocols governing data handling, antitrust compliance, and contract‑aware AI use to reduce these significant risks.
Bernstein Shur’s Construction Group helps developers, contractors, and construction professionals manage risk and keep projects on track at every stage of the project lifecycle. The group provides sophisticated legal solutions spanning contract negotiation, project administration, dispute avoidance, and litigation, drawing on deep experience in the construction industry. David Pierson is a construction and zoning attorney who brings a rare dual perspective as a former construction manager and business owner, advising owners, developers, municipalities, and builders on contracting, permitting, land use matters, and dispute resolution with practical, field-tested insight. He can be reached at [email protected].