Is your team secretly using AI to supercharge their work? There’s no question that AI is making a big splash nowadays. Debates rage about whether it’s over-hyped, under-hyped, or the start of the end times. But that’s not the purpose of this post, however. Regardless of where you land on those debates, one thing is sure: if you’ve got employees, you’re likely benefiting from Shadow AI.
What is Shadow AI?
Shadow AI refers to the unofficial and unsanctioned use of unauthorized AI tools by your staff to get their work done. For example, employees might turn to ChatGPT for drafting emails, Midjourney for quick design mocks, or even custom bots for data analysis—all without IT approval. Having used AI tools myself, I believe they can bring tremendous value, boosting productivity when used wisely.
The Risks Beyond AI Hallucinations
However, there’s more to be concerned about than just AI hallucinations (those infamous made-up facts). Privacy is of paramount concern for many businesses, as sharing company data with third-party AI providers could lead to leaks, potentially violating regulations like GDPR or HIPAA. In some industries, it’s a matter of strict compliance, where even accidental exposure could result in hefty fines or reputational damage. Other risks include inconsistent outputs, intellectual property issues, and over-reliance on tools that might not align with your company’s standards.
Mitigation Strategies
The good news is there are strategies to help mitigate these risks. Depending on the nature of your business, you may want to encourage official AI tool usage, paired with proper education and training for staff on avoiding sensitive data sharing. This could include creating clear guidelines, like “Never input customer PII into public AI models,” or implementing approved enterprise AI platforms.
Alternatively, if compliance requirements demand it, complete blocking of these tools might be the only reasonable course of action—using network filters or endpoint security to prevent access. Tools like AI governance software can help monitor usage, while regular audits ensure adherence.
We’ve been tracking the rise of AI use in business since it hit the scene. We’ve worked with clients to understand the implications of AI on their operations, both how to harness it for gains and how to control it effectively. We aim to find that good balance (don’t want to upset our AI overlords, after all).
Ready to assess your Shadow AI risks? Contact us for a free consultation to get started.