Shadow AI refers to the unauthorized or unmanaged use of artificial intelligence tools within an organization. Similar to Shadow IT, Shadow AI occurs when employees adopt AI services — such as ChatGPT, Claude, Midjourney, or AI coding assistants — without going through proper approval, security review, or governance processes.
Shadow AI poses significant risks including data leakage (sensitive information entered into AI prompts), compliance violations (regulated data processed by unapproved services), security vulnerabilities (unvetted AI tools with weak security controls), and loss of intellectual property (proprietary information used to train external AI models).
Organizations combat Shadow AI through discovery tools that monitor network traffic for AI service usage, acceptable use policies that define approved tools, employee training on safe AI practices, and governance frameworks that balance innovation with security.
