Artificial Intelligence ("AI") is
transforming modern business, but not all usage of AI within an
organisation is visible to internal governance structures, IT, or
risk management teams and could pose a risk to businesses if not
actively monitored and controlled.
The term "Shadow AI" refers to AI
tools that are adopted by employees or business units without the
knowledge or approval of an organisation's internal governance
structures or IT department. Much like shadow IT, shadow AI can
emerge when employees use AI tools, such as generative AI and other
AI tools, outside the confines of official policies, such as an AI
governance policy or Risk management policy. While these tools
often enhance efficiency and productivity, they introduce
significant risks to organisations if they are used without proper
checks and balances.
