The growing use of unauthorized artificial intelligence tools in the workplace, known as shadow AI, is raising concerns about data security and compliance for businesses. Shadow AI refers to employees using unapproved AI applications, often to increase productivity or fill gaps left by enterprise-provided solutions.
A recent IBM-sponsored study found that 80% of American office workers use AI in their roles. However, only 22% rely solely on employer-provided tools. The rest combine personal and enterprise apps or avoid company-approved tools altogether. This practice can lead to data leaks and compliance issues. According to IBM’s 2025 Cost of a Data Breach Report, organizations with high levels of shadow AI faced $670,000 higher breach costs than those with minimal or no shadow AI.
Companies are encouraged to balance employee needs for productivity with risk management. Blocking public AI tools entirely may drive their use underground and make it harder for security teams to monitor activity. Instead, experts suggest offering secure, approved alternatives that meet user requirements and incorporating governance from the outset.
IBM has worked with organizations such as Lockheed Martin to unify systems into a single data platform that supports internal AI innovation while maintaining strict security standards. Internally, IBM uses its own technologies through its “Client Zero” approach. One example is the AskHR digital assistant, which has handled over 10 million interactions and automated more than 765,000 tasks.
Leaders are advised to assess current AI usage in their organizations, offer secure alternatives, embed governance practices throughout the process, train employees on risks associated with unapproved tools, and regularly audit activities. Training is considered essential; 60% of surveyed employees said hands-on learning would increase their use of approved AI solutions.
As generative AI becomes increasingly important in workplaces—80% of workers expect it will play a significant role within five years—organizations must act now to ensure responsible deployment that protects client information and business interests.
The Austin Chamber of Commerce supports local businesses by organizing events focused on innovation and economic trends while fostering community partnerships for growth (official website). The organization also promotes inclusive development across neighborhoods (official website) and relies on board leadership for its initiatives (official website). Its efforts cover economic development within the Austin region (official website).
“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.”
