Shadow AI is the use of AI tools, models, or services within an organization without formal approval, visibility, or governance from IT or security teams.
Why It Matters
Employees adopt AI tools to solve immediate problems long before formal policy catches up, creating uncontrolled data exposure and compliance risk that leadership often doesn’t know exists until an audit or incident surfaces it. Industry data shows roughly two-thirds of office professionals have used unauthorized AI tools at work.
A Practical Example
An employee pastes a customer contract into a free AI writing tool to help draft a summary, unaware that the tool’s terms of service allow the vendor to retain and potentially train on that data.
Related Terms
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