Samsung Electronics Co. is banning employee use of popular generative AI tools like ChatGPT after discovering staff uploaded sensitive code to the platform, dealing a setback to the spread of such technology in the workplace.

The Suwon, South Korea-based company notified staff at one of its biggest divisions on Monday about the new policy via a memo reviewed by Bloomberg News. The company is concerned that data transmitted to such artificial intelligence platforms including Google Bard and Bing is stored on external servers, making it difficult to retrieve and delete, and could end up being disclosed to other users, according to the document.

The company conducted a survey last month about the use of AI tools internally and said that 65 percent of respondents believe that such services pose a security risk. Earlier in April, Samsung engineers accidentally leaked internal source code by uploading it to ChatGPT, according to the memo. It’s unclear what the information encompassed.

A Samsung representative confirmed a memo was sent last week banning the use of generative AI services.

“Interest in generative AI platforms such as ChatGPT has been growing internally and externally,” Samsung told staff. “While this interest focuses on the usefulness and efficiency of these platforms, there are also growing concerns about security risks presented by generative AI.”

Samsung is just the latest big company to express concern about the technology. In February, only a couple of months after OpenAI’s chatbot service stirred up a storm of interest in the technology, some Wall Street banks including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. either banned or restricted its use. Italy also barred the use of ChatGPT over privacy fears, though it reversed its stance in recent days.

The new Samsung rules ban the use of generative AI systems on company-owned computers, tablets and phones, as well as on its internal networks. They do not affect the company’s devices sold to consumers, such as Android smartphones and Windows laptops.

Samsung asked employees who use ChatGPT and other tools on personal devices to not submit any company-related information or personal data that could reveal its intellectual property. It warned that breaking the new policies could result in being fired.

“We ask that you diligently adhere to our security guideline and failure to do so may result in a breach or compromise of company information resulting in disciplinary action up to and including termination of employment,” Samsung said in the memo.

In the meantime, the company is creating its own internal AI tools for translation and summarizing documents as well as for software development. It’s also working on ways to block the upload of sensitive company information to external services. Last month, ChatGPT added an “incognito” mode that allows users to block their chats from being used toward AI model training.

“HQ is reviewing security measures to create a secure environment for safely using generative AI to enhance employees’ productivity and efficiency,” the memo said. “However, until these measures are prepared, we are temporarily restricting the use of generative AI.”

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(Updates with Samsung confirmation)

–With assistance from Sohee Kim.

Photo: The Samsung Electronics Co. Ltd logo sits on banners flying outside the venue ahead of the opening of the IFA consumer electronics show in Berlin, Germany, on Wednesday, Sept. 4, 2013. Photographer: Krisztian Bocsi/Bloomberg