Shadow AI is when staff use AI tools the business hasn’t approved or doesn’t know about. Examples include pasting customer details into a free chatbot, uploading contracts to an AI summariser, or installing AI browser extensions.
It usually happens because people are trying to work faster, not to cause harm. The risk is that confidential or personal data leaves your control, which can breach UK GDPR or client contracts. We found shadow AI at a Sussex recruitment firm during an AI Readiness Sprint. Staff were already using ChatGPT with no policy in place.
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