Shadow AI, the use of unauthorized artificial intelligence tools in workplaces, is becoming a significant concern for businesses across various industries. When employees turn to unapproved AI applications—such as chatbots—to increase productivity, they may inadvertently expose sensitive data to security breaches and compliance risks.
A recent IBM-sponsored study found that 80% of American office workers use AI in their roles, but only 22% rely solely on employer-provided tools. The majority either mix personal and enterprise apps or avoid company-approved solutions altogether. This trend increases vulnerability to data leaks and misinformation. According to IBM’s 2025 Cost of a Data Breach Report, organizations with high levels of shadow AI experienced breach costs $670,000 higher than those with minimal or no shadow AI usage.
To address these risks while meeting employee needs for efficient technology, experts suggest that simply blocking public AI tools can drive their use underground and leave security teams unaware of potential threats. Instead, providing secure and approved alternatives—and embedding governance from the start—can help maintain both productivity and compliance.
IBM cites its own experience through the “Client Zero” approach, using its technologies internally. For example, IBM’s AskHR digital assistant has handled over 10 million interactions, automated more than 765,000 tasks, and resolved 94% of HR inquiries. “This initiative has lowered operating costs and created new roles,” the company states, “proving that AI can drive productivity when paired with robust governance and security.”
The company also highlights work with Lockheed Martin in aerospace, where it helped replace dozens of disconnected systems with a unified platform that supports internal AI innovation while maintaining strict security standards.
Leaders are encouraged to take practical steps: assess current AI usage to identify shadow practices; offer secure alternatives; embed governance measures; train staff on risks; and monitor usage regularly. Training is especially important—60% of surveyed employees said hands-on learning would increase their use of approved AI tools.
“Organizations that combine governance, security, and enablement will unlock AI’s full potential while protecting the data and trust of their clients and business partners,” IBM notes.
With most workers expecting AI to play an important role in their jobs over the next few years—and half calling it essential—companies are urged to act now to ensure responsible deployment.
Generative AI offers significant benefits if managed responsibly. Companies are advised to prioritize security and compliance measures to realize productivity gains without exposing themselves to unnecessary risk from shadow AI practices.
The Austin Chamber of Commerce works to enhance the regional economy by fostering partnerships between businesses and community organizations for mutual growth. It organizes events focused on innovation and economic trends while supporting local enterprises in building a supportive environment for inclusive development (https://limpar.locallabs.com/organizations/c587ea13-249c-4ff6-a49d-231cb5297a84). The Chamber promotes inclusive growth throughout neighborhoods (https://www.austinchamber.com/) by encouraging collaboration among stakeholders (https://www.austinchamber.com/). Its board leadership directs initiatives aimed at advancing both economic efforts (https://www.austinchamber.com/) and community support (https://www.austinchamber.com/), particularly within the Austin region (https://www.austinchamber.com/).
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