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ARTICLE · 22 OCTOBER 2026

Shadow AI: What Risks Are Hiding In The Shadows?

Lewis Silkin
Lewis Silkin
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Lewis Silkin

Lewis Silkin

Joint managing partners: Jo Farmer, Richard Miskella International offices: Dublin, Hong Kong...

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Employees are increasingly using unauthorised AI tools at work, creating significant data protection and compliance risks for employers. This analysis explores the phenomenon of "shadow AI" - the use of unapproved AI applications outside an organisation's approved systems - and examines why HR teams handling sensitive personal data should be especially concerned about this growing workplace trend.

United KingdomPrivacy
Sean Illing
Sean Illing
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Employees are increasingly turning to unauthorised AI tools at work - 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 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. For HR and compliance professionals, this trend raises serious questions about data protection, confidentiality and

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