Choosing the right AI vendor can make or break your product. With hundreds of AI providers offering everything from foundation models to specialized APIs, making the right choice requires a systematic evaluation process. This template helps you evaluate vendors objectively and make defensible decisions.
Why AI Vendor Selection Is Different
Unique AI Vendor Challenges
Rapid Model Evolution
Models improve monthly; today's leader may be tomorrow's laggard
Pricing Volatility
Token pricing changes frequently; lock-in risks are real
Quality Variance
Performance varies by use case; benchmarks don't tell the full story
Data Privacy Concerns
Training data usage policies vary widely between vendors
AI Vendor Selection Template
Copy and customize this template for your AI vendor evaluations:
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║ AI VENDOR SELECTION DOCUMENT ║
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EVALUATION OVERVIEW
────────────────────────────────────────────────────────────────────
Project Name: [Name of AI initiative]
Evaluation Lead: [PM Name]
Evaluation Period: [Start Date] - [End Date]
Decision Deadline: [YYYY-MM-DD]
Stakeholders: [Engineering, Legal, Security, Finance]
BUSINESS REQUIREMENTS
────────────────────────────────────────────────────────────────────
Primary Use Case:
[Describe the main AI capability needed]
Success Criteria:
• [Measurable outcome 1]
• [Measurable outcome 2]
• [Measurable outcome 3]
Non-Negotiable Requirements:
• [Hard requirement 1 - e.g., SOC 2 compliance]
• [Hard requirement 2 - e.g., <500ms latency]
• [Hard requirement 3 - e.g., no training on our data]
Nice-to-Have Features:
• [Preferred feature 1]
• [Preferred feature 2]
VENDORS UNDER EVALUATION
────────────────────────────────────────────────────────────────────
Vendor A: [Name]
- Product: [Specific product/API]
- Contact: [Sales rep name and email]
- Trial Status: [Active/Pending/Complete]
Vendor B: [Name]
- Product: [Specific product/API]
- Contact: [Sales rep name and email]
- Trial Status: [Active/Pending/Complete]
Vendor C: [Name]
- Product: [Specific product/API]
- Contact: [Sales rep name and email]
- Trial Status: [Active/Pending/Complete]
╠══════════════════════════════════════════════════════════════════╣
║ EVALUATION CRITERIA ║
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1. CAPABILITY & QUALITY (Weight: 30%)
────────────────────────────────────────────────────────────────────
Vendor A Vendor B Vendor C
Output Quality [1-5] [1-5] [1-5]
Task Accuracy [1-5] [1-5] [1-5]
Edge Case Handling [1-5] [1-5] [1-5]
Customization Options [1-5] [1-5] [1-5]
────────────────────────────────────────────────────────────────────
Category Score [X/20] [X/20] [X/20]
Testing Notes:
[Document specific test results and observations]
2. RELIABILITY & SUPPORT (Weight: 25%)
────────────────────────────────────────────────────────────────────
Vendor A Vendor B Vendor C
Uptime SLA [1-5] [1-5] [1-5]
Support Response Time [1-5] [1-5] [1-5]
Documentation Quality [1-5] [1-5] [1-5]
Community/Ecosystem [1-5] [1-5] [1-5]
────────────────────────────────────────────────────────────────────
Category Score [X/20] [X/20] [X/20]
3. SECURITY & COMPLIANCE (Weight: 20%)
────────────────────────────────────────────────────────────────────
Vendor A Vendor B Vendor C
Data Privacy Policy [1-5] [1-5] [1-5]
Certifications [1-5] [1-5] [1-5]
Training Data Usage [1-5] [1-5] [1-5]
Audit Capabilities [1-5] [1-5] [1-5]
────────────────────────────────────────────────────────────────────
Category Score [X/20] [X/20] [X/20]
Security Checklist:
[ ] SOC 2 Type II certified
[ ] GDPR compliant
[ ] HIPAA compliant (if needed)
[ ] No training on customer data
[ ] Data residency options available
[ ] Encryption at rest and in transit
4. PRICING & ECONOMICS (Weight: 15%)
────────────────────────────────────────────────────────────────────
Vendor A Vendor B Vendor C
Base Pricing [$/unit] [$/unit] [$/unit]
Volume Discounts [Yes/No] [Yes/No] [Yes/No]
Contract Flexibility [1-5] [1-5] [1-5]
Hidden Costs [1-5] [1-5] [1-5]
────────────────────────────────────────────────────────────────────
Est. Monthly Cost [$X,XXX] [$X,XXX] [$X,XXX]
Est. Annual Cost [$XX,XXX] [$XX,XXX] [$XX,XXX]
Cost Projection (12 months):
Current volume: [X requests/month] = $[amount]
6-month volume: [X requests/month] = $[amount]
12-month volume: [X requests/month] = $[amount]
5. STRATEGIC FIT (Weight: 10%)
────────────────────────────────────────────────────────────────────
Vendor A Vendor B Vendor C
Vendor Stability [1-5] [1-5] [1-5]
Roadmap Alignment [1-5] [1-5] [1-5]
Integration Ease [1-5] [1-5] [1-5]
Exit Strategy [1-5] [1-5] [1-5]
────────────────────────────────────────────────────────────────────
Category Score [X/20] [X/20] [X/20]
╠══════════════════════════════════════════════════════════════════╣
║ FINAL SCORING ║
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WEIGHTED SCORES
────────────────────────────────────────────────────────────────────
Category Weight Vendor A Vendor B Vendor C
────────────────────────────────────────────────────────────────────
Capability & Quality 30% [X.X] [X.X] [X.X]
Reliability & Support 25% [X.X] [X.X] [X.X]
Security & Compliance 20% [X.X] [X.X] [X.X]
Pricing & Economics 15% [X.X] [X.X] [X.X]
Strategic Fit 10% [X.X] [X.X] [X.X]
────────────────────────────────────────────────────────────────────
TOTAL SCORE 100% [X.X] [X.X] [X.X]
RECOMMENDATION
────────────────────────────────────────────────────────────────────
Selected Vendor: [Vendor Name]
Rationale:
[2-3 sentences explaining why this vendor was selected]
Key Risks:
• [Risk 1 and mitigation]
• [Risk 2 and mitigation]
Next Steps:
1. [Action item 1] - Owner: [Name] - Due: [Date]
2. [Action item 2] - Owner: [Name] - Due: [Date]
3. [Action item 3] - Owner: [Name] - Due: [Date]
╠══════════════════════════════════════════════════════════════════╣
║ APPROVALS ║
╠══════════════════════════════════════════════════════════════════╣
Product: [Name] _________________ Date: _________
Engineering:[Name] _________________ Date: _________
Security: [Name] _________________ Date: _________
Legal: [Name] _________________ Date: _________
Finance: [Name] _________________ Date: _________
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Contract Considerations Checklist
Key Contract Terms to Negotiate
Pricing & Commitment
- Price lock period (aim for 12-24 months)
- Volume commitment flexibility (+/- 20% buffer)
- Overage rates clearly defined
- Payment terms (monthly vs. annual)
Service Level Agreements
- Uptime guarantee (99.9% minimum)
- Latency SLAs (P50, P95, P99)
- Credit/refund mechanism for SLA breaches
- Planned maintenance windows
Data & IP Rights
- No training on your data without consent
- Data deletion upon termination
- IP ownership of fine-tuned models
- Audit rights for compliance
Exit & Termination
- Termination for convenience clause
- Data portability provisions
- Transition assistance period
- No lock-in penalties after initial term
Vendor Red Flags
Warning Signs to Watch For
Pricing Red Flags
- Unclear or hidden fees
- No volume discounts at scale
- Mandatory long-term commitments upfront
- Pricing changes without notice
Technical Red Flags
- No sandbox/trial environment
- Poor or outdated documentation
- No version pinning available
- Frequent breaking changes
Business Red Flags
- Unclear funding/runway situation
- Key personnel departures
- No reference customers in your industry
- Evasive about roadmap questions
Security Red Flags
- No SOC 2 or equivalent certification
- Trains on customer data by default
- No data residency options
- Unclear incident response process
Recommended Evaluation Timeline
WEEK 1: DISCOVERY & SHORTLISTING
────────────────────────────────────────────────────────────────────
Day 1-2: Define requirements and evaluation criteria
Day 3-4: Research market, create long list (8-10 vendors)
Day 5: Initial screening, narrow to short list (3-4 vendors)
WEEK 2: INITIAL EVALUATION
────────────────────────────────────────────────────────────────────
Day 1-2: Request trials/sandboxes from shortlisted vendors
Day 3-4: Review documentation, pricing, and compliance docs
Day 5: Initial technical testing with sample data
WEEK 3: DEEP EVALUATION
────────────────────────────────────────────────────────────────────
Day 1-3: Comprehensive testing against real use cases
Day 4: Security and compliance review with InfoSec
Day 5: Cost modeling at projected volumes
WEEK 4: DECISION & NEGOTIATION
────────────────────────────────────────────────────────────────────
Day 1: Score all vendors, prepare recommendation
Day 2: Present to stakeholders, gather feedback
Day 3-4: Contract negotiation with selected vendor
Day 5: Final decision and approval sign-off
Quick Decision Matrix
When to Choose Each Vendor Type
Choose Major Cloud Providers (AWS, GCP, Azure) When:
- You need enterprise-grade SLAs and support
- Compliance requirements are strict (healthcare, finance)
- You want consolidated billing with existing cloud spend
- Data residency requirements are non-negotiable
Choose Specialized AI Vendors (OpenAI, Anthropic) When:
- State-of-the-art model quality is critical
- You need the latest model capabilities quickly
- Your use case is language/reasoning heavy
- Speed of innovation matters more than stability
Choose Open Source / Self-Hosted When:
- Data cannot leave your infrastructure
- You need full model customization control
- Long-term cost optimization is the priority
- You have strong ML engineering capabilities