Artificial intelligence (AI) tools are ubiquitous in today’s work environment. Writing assistants, image generators, note takers, and meeting summaries are just a few examples. Many of them are free, fast, and easy to use. Therefore, it’s no surprise that people start using them at work without asking first. This quiet use of AI tools is commonly referred to as Shadow AI.

What Is Shadow AI?

Shadow AI refers to the use of AI by an employee without the approval of their employer. For example, this can happen when a worker copies and pastes text into an AI program in order to generate a new email or uses an AI tool to summarize a long file. It can also happen when an employee creates images using AI tools for presentations.

Shadow AI’s popularity can be attributed to its ease of use and convenience. According to a report by UpGuard, around 80% of workers report using unapproved AI tools. Employees don’t have to fill out a lengthy request for IT to approve the use of an AI solution. Instead, they simply need to open a web browser, copy and paste their work into the tool, and continue with their workday.

Why People Turn to Shadow AI

People typically turn to Shadow AI for straightforward, practical reasons:

• Emails, files, and numerous small project tasks cause pressure at work.
• AI tools can assist in writing, summarizing, or arranging thoughts very rapidly.
• Many tools are free and easily accessible, with no setup or approval required.
• Using AI tools boosts individual productivity.

Thus, shadow AI is attractive to many because it provides convenience and rapid results for seemingly overwhelming workloads. Even though they may appear benign, shadow AI also poses many confidentiality and security concerns, as data is often sent across unsecured channels.

The Hidden Risks Most People Don’t See

The main issue with Shadow AI isn’t the tool itself, but the data shared with it. When you paste work content into an AI tool, you may be exposing sensitive information. Once that data leaves your device, you lose control over its storage and use, with some tools retaining it for improvement or sharing it with third parties. Even small actions add up over time, increasing the risk. IBM’s 2025 report revealed that 20% of organizations had suffered a breach due to Shadow AI.

Beyond security issues, regulatory concerns are a significant part of Shadow AI. If employees use unauthorized AI tools it can violate data privacy laws like GDPR. Additionally, inputting financial or health information into these tools may unknowingly violate industry-specific regulations like SOC2 or HIPAA.

Why AI Is Hard to Control at Work

The rapid advancement of AI has left many businesses confused about how to handle their growing use in the workplace. With little to no regulation, many companies find themselves uncertain as to what the future holds regarding this technology.

As well as the lack of a consistent approach, departments within the same company may hold differing views on whether or not to adopt AI technology. While some would prefer to ban the use of AI, others feel that it’s essential to overall productivity. This divergence leads to confusion within the organization and hinders the implementation of AI across departments.

In addition to that, Shadow AI isn’t confined to just work laptops. Many workers test Shadow AI while connected to public networks on their smartphones, and can expose company data to external threats that way.

Organizations should encourage the use of a VPN to encrypt all data traffic and serve as an important security tool to secure the information before it leaves a worker’s device. If you’ve ever asked yourself, “Can I get a VPN on my phone?” the answer is yes. It’s one of several practical steps organizations should recommend for employees browsing on unsecured networks or working remotely.

Is All Shadow AI Bad?

Not necessarily. While wanting to be more productive isn’t a negative thing, the problem lies in using very powerful tools without understanding the associated risks.

Many of the most reputable AI tools can be effectively utilized as long as an employee understands the inherent risks. Conversely, many of the less reputable AI products are purposely created with higher risks associated with them. Due to the lack of established rules, employees can easily cross into the “unsafe” area without realizing it.

Finding a Better Balance

Open discussions about approved tools, data restrictions, and their purpose are essential for creating a transparent and supportive environment. When employees have access to the right tools and understand the reasons behind data limitations, they’re less likely to resort to Shadow AI. However, like with any technology, it’s crucial to strike the right balance between flexibility and control to ensure both productivity and security.