“You may provide
input to the Services (‘Input’) and receive output (‘Output’). OpenAI may use
Content to provide and maintain the Services, comply with applicable law, and
enforce our policies. You grant OpenAI a license to use Content as
necessary.”
“You own the assets
you create with the Services, but you grant Midjourney a non-exclusive,
worldwide, royalty-free license to use, copy, modify, and distribute
them for any purpose.”
As AI usage becomes entrenched
in everyday life, it would be impractical, to the point of point of being
absurd, to obtain approval for every usage of an AI system. However, this does
not mean that the obligation should be ignored, quite the contrary.
What SARB is really
interested in
The South African Reserve Bank (SARB) enforcement
focus is typically directed at transactions involving material or recurring
commercial value; strategic or core IP assets; exclusive or perpetual rights;
or a transfer or waiver of rights central to a South African business's
operations or value chain.
In practical terms, SARB is unlikely to
scrutinise casual, low-value use of offshore AI systems by individual users.
But enterprises using AI platforms to create high-value content or inventions, especially
when such output is subject to broad license-back clauses, face a tangible
regulatory risk.
Accordingly, South African users should
assess the materiality of the AI output, the breadth of rights licensed back,
and the commercial use of such content, and seek professional exchange control
advice where the output forms a meaningful part of the business model, IP
portfolio, or revenue base.
Scenario-Based Risk Flags for Exchange
Control Advice
• A consultancy uses an AI System to
generate high-value client deliverables and the platform’s terms include
perpetual reuse rights to the AI provider.
• A creative agency uses an AI System to
produce visual assets or branding elements for commercial use, licensed back to
the offshore provider.
• A software company integrates AI System
APIs into a product that uses user prompts to generate exportable code or
documentation.
• The AI output is incorporated into
patented inventions or copyrighted works later commercialised abroad.
• The IP created is central to the
company's valuation, e.g., start-ups relying on AI-assisted invention or
branding.
Lower Risk Scenarios (But Not Risk-Free)
• A sole trader or freelancer casually uses
AI platforms for idea generation or illustration, with no significant
commercial dependency on the output.
• The use is incidental or internal, with
no redistribution or monetisation of the content.
• The output is ephemeral, non-strategic, and doesn’t result in a substantive economic right being granted to the offshore AI platform.
Practical Steps
Assess the nature of your AI use: Is the AI output strategic or high-value? Does the license-back clause involve perpetual or commercial rights? Will the content be monetised, distributed, or incorporated into exported IP?
Where the answer to any of these is yes or you have doubt, exchange control
advice is both prudent and legally necessary.
Note: It is the South African user, not
the AI provider, who bears the legal risk of non-compliance with exchange
control regulations. Failing to obtain SARB approval may render the contract
invalid (which could result in the loss of the IP assets) and result in
penalties.
