The Alarming Rise of Shadow AI: Understanding Its True Threat – Communications of the ACM

Organizations are increasingly facing challenges from unauthorized AI tools used by employees, akin to the issue of Shadow IT. A study shows that while firms utilize an average of 67 AI tools, 90% lack IT approval. Many employees access generative AI assistants like ChatGPT through personal accounts, with 57% admitting to sharing sensitive data. Developers are significant contributors to this Shadow AI, leading to risks in regulated industries like finance. Factors driving this trend include dissatisfaction with existing tools and the rapid evolution of AI technology. To address these risks, experts suggest implementing clear policies, data governance strategies, and investing in internal AI tools and training. Creating “safe sandboxes” for employee experimentation can promote innovation while protecting sensitive information. Executives agree that balancing risk and reward is crucial, advocating for guardrails and educational initiatives rather than outright bans on AI tools, as avoiding AI could hinder progress.

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