This phenomenon is especially concerning for sensitive documents like immigration paperwork, medical records, or legal files. I've been working on PrivaVault (launching in 3 days) specifically because of this using client-side encryption so the service provider literally can't access your files, regardless of what the privacy policy says or how it changes. The architecture makes privacy a technical guarantee rather than a legal promise.
For anyone dealing with AI tools and sensitive docs right now: assume anything you upload can be read by the company, their employees, and potentially used for training unless they explicitly state otherwise AND use encryption where they don't hold the keys.