How to Create a Non-Disclosure Agreement (NDA) with AI in 2025: Step-by-Step Guide

If you’re reading this, you probably need an NDA—and you need it soon.

Maybe you’re about to share sensitive information with a potential client. Perhaps you’re hiring a contractor who’ll have access to your intellectual property. Or you might be entering negotiations where confidential details will be discussed.

Whatever your situation, you have three options:

1. Use a generic template (risky, potentially unenforceable)
2. Hire an attorney (expensive, time-consuming)
3. Create a customized NDA with AI (affordable, fast, and surprisingly effective)

As an attorney who’s both drafted countless NDAs traditionally and now helps businesses implement AI legal solutions, I can tell you confidently: the landscape has changed dramatically. In 2025, AI is creating NDAs that rival attorney-drafted documents at a fraction of the cost and time.

In this complete guide, I’ll walk you through exactly how to create a legally sound NDA using AI legal assistants, with specific examples, common pitfalls to avoid, and expert tips from my 15+ years of contract experience.

What Makes a Good NDA (Regardless of How It’s Created)

Before diving into the AI creation process, let’s be clear about what constitutes an effective non-disclosure agreement. Any good NDA should:

1. Clearly define what information is considered confidential
2. Specify permitted uses of the confidential information
3. Establish the term of confidentiality obligations
4. Outline exceptions to confidentiality
5. Include appropriate remedies for breach

The challenge has always been creating an NDA that addresses these elements for your specific situation—without spending hours drafting or hundreds of dollars on legal fees.

That’s where AI comes in.

How AI Creates Better NDAs Than Templates

I’ve reviewed thousands of NDAs in my career, and template-based NDAs consistently fall short in these critical areas:

Step-by-Step: Creating Your Custom NDA with AI

Let’s walk through the exact process of creating a high-quality NDA using an AI legal assistant. I’ll use Airstrip AI for this example, but the process is similar with other specialized legal AI tools.

Step 1: Define the Parties and Relationship

When creating your NDA, start by clearly establishing:

1. Who is disclosing information? (one party, both parties, or multiple parties)
2. What is the nature of the relationship? (client, vendor, potential partnership, employment, etc.)
3. What jurisdiction will govern the agreement? (important for enforceability)

The AI will ask you for this information directly. For example:

Key tip: Be specific about the relationship. Instead of just saying “business relationship,” specify “potential software development client” or “marketing contractor relationship.” This helps the AI tailor protections appropriately.

Step 2: Define Confidential Information

This is where generic templates often fail catastrophically, but where AI excels. You’ll want to:

1. List specific categories of information that need protection
2. Include any special formats (like code, designs, formulas, etc.)
3. Specify exclusions if certain information doesn’t need protection

For example, if you’re a SaaS company, you might include:

• Software architecture and source code
• Customer lists and pricing strategies
• Marketing plans and unreleased features
• Financial projections and funding details

The AI will guide you through this process, often suggesting industry-specific categories you might have forgotten. Here’s what that looks like:

Step 3: Specify Purpose and Permitted Uses

A critical element often missed in generic NDAs is clearly defining why the recipient is receiving confidential information and what they’re allowed to do with it.

The AI will typically ask you:

1. What is the specific purpose of sharing information?
2. What limitations do you want to place on the information’s use?
3. Who on the recipient’s team should have access?

For example, if you’re sharing information with a potential development partner, you might specify: “Evaluation of potential software development partnership and preparation of project scope and estimate.”

Step 4: Define Term and Survival Provisions

Now you’ll need to establish:

1. How long the agreement lasts (the term)
2. How long confidentiality obligations survive after the agreement ends

This is another area where AI shines by providing context-appropriate recommendations. For instance:

• Trade secrets: Might warrant indefinite protection
• Marketing plans: Might need only 1-3 years of protection
• Client lists: Might need 2-5 years of protection

The AI will guide you through these choices with explanations like this:

Step 5: Customize Remedies and Enforcement

Generic templates often include boilerplate remedy provisions that may not be appropriate for your situation. AI-generated NDAs allow you to create enforcement mechanisms that make sense for your specific context.

You’ll typically be asked about:

1. Injunctive relief preferences
2. Liquidated damages options
3. Dispute resolution approach (litigation, arbitration, etc.)

For example, if your information is highly valuable intellectual property, you might want strong injunctive relief provisions and potential liquidated damages. For less sensitive information, you might prefer a more collaborative dispute resolution process.

Step 6: Review and Customize the Generated NDA

Once the AI generates your custom NDA, take time to:

1. Review the definitions to ensure they cover your specific information
2. Check jurisdiction-specific elements like governing law and venue
3. Ensure the obligations make sense for your relationship
4. Verify any specialized provisions related to your industry

Most AI legal assistants allow you to make additional customizations after the initial draft, so don’t hesitate to request changes like “strengthen the non-solicitation provision” or “clarify the return of information requirements.”

Real Example: AI-Generated vs. Attorney-Drafted NDA

To illustrate the quality of today’s AI-generated NDAs, let’s compare a section from a traditional attorney-drafted NDA with one created using AI:

Traditional Attorney NDA (Confidential Information Definition):

"Confidential Information" means any and all technical and non-technical information provided by Disclosing Party to Receiving Party, including but not limited to patent and patent applications, trade secrets, and proprietary information, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulae related to the current, future and proposed products and services of Disclosing Party, and includes, without limitation, Disclosing Party's information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, business forecasts, sales and merchandising, and marketing plans and information.

AI-Generated NDA (Confidential Information Definition):

"Confidential Information" means any non-public information that Disclosing Party designates as confidential or that, under the circumstances of disclosure, Receiving Party should reasonably understand to be confidential. This includes, but is not limited to:

(a) Technical Information: software code, algorithms, development tools, system architecture, technical specifications, development roadmaps, and research data;

(b) Business Information: customer and prospect lists, pricing strategies, financial projections, marketing plans, business strategies, and partnership opportunities;

(c) Product Information: unreleased product features, design documents, user experience flows, and product roadmaps;

(d) Any materials marked "Confidential" or "Proprietary" or bearing similar legends; and

(e) Any information that would reasonably be considered confidential given its nature and the circumstances of disclosure.

Confidential Information excludes any information that: (i) was rightfully known to Receiving Party before receiving it from Disclosing Party; (ii) is independently developed by Receiving Party without use of or reference to Disclosing Party's Confidential Information; (iii) is or becomes generally known to the public through no wrongful act of Receiving Party; or (iv) is rightfully received by Receiving Party from a third party without restriction on disclosure.

Notice how the AI version is:

• More readable and clearly organized
• Tailored to software/technology contexts
• Includes explicit examples in logical categories
• Clearly states the exceptions

Common NDA Provisions You Might Need (That AI Can Generate)

Depending on your specific situation, you might need specialized NDA provisions. Modern AI legal assistants can generate all of these:

1. Non-solicitation provisions preventing poaching of employees or clients
2. Residual information clauses for knowledge that can’t be “unlearned”
3. Return or destruction of information requirements
4. Specific security measures for handling confidential information
5. Notification requirements for disclosure requests or breaches
6. Assignment and successor provisions for company changes
7. Specific exclusions for independent development

For example, if you need a non-solicitation provision, the AI might generate something like this:

Non-Solicitation. During the term of this Agreement and for a period of one (1) year thereafter, Receiving Party shall not, directly or indirectly, solicit, hire, or attempt to solicit any employee, contractor, or consultant of Disclosing Party with whom Receiving Party had contact or about whom Receiving Party received Confidential Information, without the prior written consent of Disclosing Party.

Special Considerations for Different NDA Types

AI legal assistants excel at creating different types of NDAs for specific situations:

One-Way vs. Mutual NDAs

For one-way NDAs (where only one party is disclosing information), the AI will:

• Focus protections on the disclosing party
• Create stricter usage limitations
• Often include stronger remedy provisions

For mutual NDAs (where both parties share information), the AI will:

• Balance obligations for both parties
• Create reciprocal rights and protections
• Often include more collaborative enforcement mechanisms

Learn more about choosing between one-way and mutual NDAs

Employee/Contractor NDAs

For employee or contractor NDAs, AI can create specialized provisions for:

• Work-for-hire intellectual property assignments
• Return of company property sections
• Post-termination obligations
• Integration with employment agreements

See our guide on contractor agreements with confidentiality provisions

Investment/Acquisition NDAs

For investment discussions or acquisition talks, AI can generate provisions for:

• Specific protections for financial information
• Due diligence processes and limitations
• Standstill provisions preventing competitive actions
• Special handling of highly sensitive information

State-Specific NDA Considerations

One major advantage of AI-generated NDAs is the ability to incorporate jurisdiction-specific requirements. For example:

• California NDAs can include appropriate carve-outs for employee invention assignments per California Labor Code
• New York NDAs can incorporate specific statute of limitations considerations
• Texas NDAs can address appropriate non-compete language given state restrictions

The AI will ask for your jurisdiction and incorporate relevant requirements automatically:

Learn more about state-specific document requirements

Reviewing Your AI-Generated NDA

After creating your NDA with AI, follow this quick checklist:

1. Verify party information is complete and accurate
2. Check confidentiality definition covers all your critical information
3. Confirm the term length is appropriate for your needs
4. Review the permitted use section to ensure it’s properly limited
5. Verify remedies are appropriate for the information value
6. Check governing law matches your desired jurisdiction

For critical NDAs or those covering extremely valuable information, consider having an attorney review the AI-generated document. This gives you the best of both worlds: an AI-generated foundation with human legal expertise for final validation.

How AI Legal Assistants Keep Your NDA Updated

Unlike static templates, AI legal assistants can help keep your NDAs current as:

1. Laws and regulations change
2. Your business evolves
3. New types of confidential information emerge

Many AI systems will alert you when significant legal changes affect your documents, allowing you to update them easily rather than starting from scratch.

Conclusion: The New Standard for Creating NDAs

Creating an NDA no longer requires choosing between questionable templates or expensive legal fees. AI legal assistants have fundamentally changed the landscape, allowing businesses of all sizes to create high-quality, customized NDAs in minutes instead of hours or days.

As someone who’s spent years drafting and reviewing NDAs the traditional way, I can confidently say: the quality of AI-generated NDAs in 2025 is remarkable. While they don’t replace attorneys for complex or high-stakes situations, for the majority of business NDAs, they provide an optimal balance of quality, speed, and cost.

Ready to create your own custom NDA with AI? Try Airstrip AI’s document creation tools and experience how simple it can be to protect your confidential information with a properly crafted NDA.

Marcus Rodriguez spent 12 years as a contracts attorney before focusing on legal technology solutions. He now helps businesses implement AI legal systems while maintaining his legal advisory practice.

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