What is shadow AI?

Shadow AI refers to the unauthorized use of artificial intelligence (AI) tools in applications within an organization.

Looking at the workplace, this means employees are accessing generative tools such as ChatGPT to perform various tasks. From drafting emails and creating images to writing code and more.

For an organization’s IT department, this is a nightmare, and AI adoption is growing:

49%

of people have used generative AI

33%

use it daily

52%

of generative AI users say their usage is increasing

Source: Salesforce

How does shadow AI happen?

So why do individuals or teams use AI tools or systems without official approval?

Desire for efficiency and innovation

Employees often seek AI tools to automate tasks, improve productivity, or gain a competitive edge. They may see AI as a way to streamline processes, make better decisions, or enhance their work output.

Ease of access and adoption

Cloud-based AI services and easy-to-use tools make it simple for anyone to use AI without IT help.

Lack of awareness or guidance

Employees may not be aware of the company’s policies or guidelines regarding AI. Or they don’t understand the potential risks associated with using unauthorized tools.

Limited resources or support

The organization may not have readily available or approved AI solutions that meet specific employee needs. For example, only 4.39% of companies have fully integrated AI tools throughout their organization. This could prompt them to seek alternatives on their own.

Misaligned incentives

Sometimes organizations prioritize immediate results, individual goals, and ad-hoc tasks over long-term goals. In such instances, employees might bypass formal processes and use alternative ways to finish their jobs.

How shadow AI typically occurs:

  • Use of free AI tools: Employees may find and utilize free AI applications or plugins online without informing IT.
  • Upgrading existing tools with AI: Employees may enable AI features in existing software or platforms without seeking permission.
  • Developing custom AI solutions: Tech-savvy individuals might build AI models or applications for specific tasks without IT oversight.

Important note: shadow AI often arises from good intentions. Employees want to improve their work and contribute to the organization. However, the lack of oversight and control can lead to security issues, data breaches, compliance issues, and other consequences.

What are the potential risks?

  • Data protection and security: Unauthorized AI tools may not have adequate security measures, potentially exposing sensitive company data to breaches or leaks.
  • Compliance issues: Using AI tools without proper governance could lead to non-compliance with industry regulations or internal policies.
  • Untrustworthy results: Unverified AI models might produce inaccurate or biased results, leading to poor decision-making.
  • Loss of control: Organizations lose control over their data and processes without visibility into AI usage.

As shadow AI is a growing threat, security teams need to take note.

How to address shadow AI?

Managing the risks of shadow AI requires an approach that combines proactive measures, transparent policies, and ongoing monitoring.

64%

of non-users say they would use generative AI more if it were safe/secure

Establish clear policies and guidelines

  • Develop comprehensive AI usage policies: Clearly define acceptable and unacceptable AI use within the organization. Outline guidelines for data handling, privacy, security, and compliance.
  • Communicate policies effectively: Ensure employees know the policies and the potential risks of using unauthorized AI tools.

Embrace and guide, don’t just ban

  • Acknowledge the potential benefits: Recognize that employees often adopt shadow AI for valid reasons, like boosting productivity. Instead of banning it outright, focus on channeling its use in a controlled manner.
  • Provide approved alternatives: Offer official AI tools and platforms that meet employee needs and adhere to security standards.

Educate and train employees

  • Raise awareness: Educate employees about shadow AI, its potential risks, and the benefits of using approved tools.
  • Provide training on AI tools and best practices: Offer training sessions on how to use approved AI tools securely.

Implement monitoring and control measures

  • Utilize monitoring tools: Deploy software to monitor network traffic and detect the use of unauthorized AI applications.
  • Conduct regular audits: Regularly assess AI usage within the organization to identify potential shadow AI activities.

Foster collaboration between IT and business units

  • Encourage open communication: Create a culture where employees feel comfortable discussing their AI needs and concerns with IT.
  • Involve business units in AI tool selection: Collaborate with business units to identify AI solutions that adhere to organizational standards.

Stay up-to-date with AI trends

  • Keep abreast of emerging AI technologies: Monitor the AI landscape to identify new tools and potential risks.
  • Update policies and guidelines regularly: Review and update AI policies and guidelines to address evolving threats and technologies.

The future of shadow AI

Shadow AI is likely here to stay.  As AI becomes more pervasive and accessible, organizations must adapt to this new reality. By adopting a collaborative approach, businesses can leverage the benefits of shadow AI while maintaining control and minimizing risks.

Remember: Shadow AI is not just a technological challenge; it’s a cultural one. By fostering a culture of trust, open communication, and continuous learning, organizations can empower employees to use AI responsibly and ethically.

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