Artificial intelligence has become part of the typical workday for most of us. From drafting reports to crunching numbers, AI tools eliminate some of the more tedious aspects of work. Who doesn’t love the chance to be creative instead of dealing with endless spreadsheets?

But as with any brand-new business tool, there’s a catch. Cybersecurity leaders are discovering that the news isn’t all that great when you consider shadow AI in business control.

AI: The New Wild West in Business

In a new survey published by Cybernews, nearly 60% of workers admitted to using AI tools that their companies had not yet approved, a phenomenon known as shadow AI.

This is a significant problem because 75% of those employees report sharing sensitive company data with these tools, and more than half admit that their direct managers encourage this practice. In fact, shadow AI tools are most used in the C-suite, with executive leaders being the most likely to rely on unvetted AI tools.

The problem of shadow AI in business control boils down to the fact that these tools fly under the radar. When people use any application they find without ensuring that it complies with their employer’s security standards, there’s no oversight over the data they enter and how the platform stores, uses, or shares it.  

How Shadow AI Threatens Organizational Control

When leadership embraces unapproved AI, employees see it as permission to follow suit. This undermines traditional checks and balances. For business owners, this means strategies, policies, and even competitive advantage could slip through the cracks.

Without visibility, organizations risk losing control over sensitive data, decision-making processes, and even intellectual property. Shadow AI poses a threat to organizational control because it creates blind spots. You can’t manage what you can’t monitor.

This lack of oversight increases the risks of shadow AI in business. Some of the biggest threats include:

• Data leakage. Employees may unknowingly feed confidential data into AI systems that store or share it.
• Compliance violations. Unapproved AI tools can violate industry regulations.
• Security gaps. Shadow AI bypasses IT safeguards, leaving companies open to cyberattacks.
• Loss of organizational control. Without oversight, it’s impossible to track who is using AI, how it’s being used, or where the data ends up.

Unfortunately, because AI tools prove so helpful, many people mistakenly believe they enhance productivity. They don’t realize they actually undermine business security.

Regaining Control Over AI Usage in Your Business

Shadow AI represents a significant threat to your company. You need to retake control of what your employees use on the job if you want to avoid data leaks or other cybersecurity problems.

Managing unapproved AI usage at work begins with educating staff about the dangers of using unapproved tools, shadow AI security, and data leakage. Implement clear policies regarding which AI tools employees can use and monitor usage to detect and block unauthorized software.

Most importantly, your executives must lead by example. Shadow AI governance best practices apply to everyone, and if leadership avoids shadow AI, employees are likely to follow suit. Balancing innovation with control can be tricky, but it’s critical to addressing the role of shadow AI in business control.

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