Shadow AI: A Modern Challenge for IT Governance

The Rise of Shadow AI

According to a Salesforce survey, 28% of workers admit to using generative AI at work, with over half doing so without the approval of their employers. The use of Shadow AI, defined as the unsanctioned use of generative AI outside of IT control, can pose significant threats to businesses.

While this unauthorized use of AI may initially boost productivity, IT leaders must recognize that it presents an opportunity to modernize their IT governance strategy. Managing strategic alignment and risk management in the face of rapidly evolving technology requires a proactive approach.

Shadow AI is similar to shadow IT, where employees subscribe to SaaS services with corporate credit cards. However, Shadow AI poses even greater risks as employees can sign up and create content without needing a credit card. This raises concerns about the safe consumption of gen AI services and the potential exposure of sensitive corporate information.

Employees may unknowingly divulge critical secrets to those who can reverse engineer prompts to gain a competitive edge. Incorporating information about patents or other trade secrets can also expose organizations to legal and copyright issues.

Despite recognizing the risks, many organizations lack mature policies and processes to govern the use of gen AI. Banning its use outright can lead to the emergence of sneaky shadow AI, which increases the risk of data breaches, compliance violations, and reputational damage.

IT leaders must collaborate with managers in legal, compliance, and risk departments to develop a centralized gen AI strategy. This includes establishing AI governance policies, providing approved tools, formalizing training, conducting regular audits, encouraging transparency and reporting, and maintaining open communication with employees.

The Importance of Good Governance

Embracing gen AI technology requires an upgrade to your governance model. As you navigate the learning curves of this emerging technology, it is crucial to ensure that your data house is in order. Determining which data is sensitive and proprietary and should be run in gen AI systems under your control is essential.

Trusted partners, like Dell Technologies, can assist in guiding your gen AI journey. Dell offers virtual assistants and open-source LLMs, allowing you to deploy gen AI systems while protecting your corporate data.

Ultimately, good governance is like insurance. It is better to have it and not need it than to need it and not have it. As gen AI continues to evolve, regular care and feeding of your governance model is necessary to avoid risky behaviors and maintain the security of your organization.

By bringing AI to your data and adopting a comprehensive governance strategy, you can ensure responsible use of gen AI technologies while maximizing their benefits.

Learn more about Dell’s AI offerings and how they can help you navigate the gen AI landscape at

Clint Boulton is Senior Advisor, Portfolio Marketing, APEX at Dell Technologies.

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