The correct answer is C.

Integrating PETs like differential privacy and homomorphic encryption directly addresses the concerns of privacy breaches while maintaining the AI system's functionality. Differential privacy ensures that the AI system can gain valuable insights from patient data without compromising individual privacy. Homomorphic encryption allows the system to process encrypted data, ensuring privacy preservation. These technologies enable the AI system to function effectively without risking sensitive patient data, aligning with the principles of privacy-enhanced AI.

A is incorrect as limiting the AI system to only non-sensitive data may significantly reduce its effectiveness in providing personalized healthcare recommendations. The goal is to maintain functionality while enhancing privacy.

B is incorrect because while obtaining explicit consent is important, it does not address how the AI system processes and protects patient data. Privacy enhancement needs to be integrated into the data processing mechanisms of the AI system.

D is incorrect as anonymizing data, while important, may not be sufficient for privacy protection, especially with advances in data re-identification techniques. The focus should be on integrating technologies that enhance privacy without compromising the AI system's access to necessary data for accurate health recommendations.

Things to Remember

• Privacy-Enhanced AI (PEAI) focuses on integrating privacy protection mechanisms into AI systems to safeguard sensitive data.
• Differential privacy is a technique that adds noise to query results to protect individual data while still allowing for accurate aggregate analysis.
• Homomorphic encryption enables computations to be performed on encrypted data without decrypting it, enhancing data security and privacy.
• Data anonymization involves removing personally identifiable information from datasets.