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ARTICLE · 04 NOVEMBER 2026

Shadow AI: What Risks Are Hiding In The Shadows?

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As employees increasingly adopt unauthorised AI tools in the workplace, organisations face mounting data protection and compliance challenges. This analysis examines the phenomenon of 'shadow AI' and outlines the critical risks HR teams must address to protect sensitive employee information and maintain regulatory compliance.

United KingdomEmployment and HR
Sean Illing (Lewis Silkin LLP)
Sean Illing (Lewis Silkin LLP)

As we mark Techtober, and Halloween approaches, it isn’t just ghosts lurking in the shadows. Employees are increasingly turning to unauthorised AI tools at work, known as ‘shadow AI’, and the data protection and compliance risks for employers are significant. Here's what HR teams need to know.

What is shadow AI?

Artificial intelligence (AI) is transforming how people work. From summarising documents to drafting communications, AI tools promise speed and efficiency and are being embraced by employees. But there is a growing problem: many of the AI tools staff are using have not been approved, assessed, or even noticed by their employers.

This is ‘shadow AI’: the use of AI applications outside an organisation’s approved systems. As the UK’s National Cyber Security Centre (NCSC) highlighted in a recent blog post, the practice is remarkably widespread, with one study finding that nearly three-quarters of employees (71%) reported using AI tools not sanctioned by their employer.

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