AI May Be Exposing Your Private Information: Dustin Stout on What’s Really Happening

Every day, people type sensitive information into free artificial intelligence (AI) tools without thinking twice about where that data actually goes.
In this episode of “Bay Area Innovators,” host Steve Ispas sits down with Dustin Stout, founder and CEO of Magai, to unpack what really happens behind the scenes when you use an AI chatbot. Stout explains that most AI tools reserve the right by default to use your prompts, files, and conversations as training data for future models, and that opting out often means digging through settings most users never find. He shares an experience of turning off data training on one app, only to find it silently switched back on a week later.
The conversation covers why free AI tools aren’t really free, how personal and proprietary information typed into a chatbot could resurface in ways users never intended, and the gap between what AI companies promise about privacy and what they actually build into their products.
Stout also shares his own path to founding Magai, including two failed startups, $65,000 in losses, and the moment ChatGPT changed the direction of his career.