Shadow AI Is the New Shadow IT in Europe’s Workplaces

Security leaders are shifting from “ban it” to “govern it” as unsanctioned AI use spreads across teams and tools.

Employees are bringing generative AI into daily work faster than most organisations can approve, audit, or secure it. In a recent analysis by Technology.org, the phenomenon is framed as “shadow AI”: the modern cousin of shadow IT, where staff adopt powerful tools outside official channels. The difference is that AI does not just store or share information—it can transform it, infer from it, and sometimes route it into systems that were never designed for that risk.

For European security and compliance teams, the challenge is no longer whether AI should be used at work, but how to regain visibility and control without freezing productivity. That balancing act is becoming a mainstream governance problem—one that touches cybersecurity, privacy, procurement, and, increasingly, fundamental rights.

What “shadow AI” looks like on the ground

Shadow AI is not limited to someone pasting text into a public chatbot. It can be far subtler: an “AI assistant” switched on inside a collaboration platform; a browser extension that rewrites emails; a plug-in that summarises client calls; or a developer using an AI coding assistant with access to proprietary repositories. In many workplaces, AI is now embedded inside tools that are already approved—making the AI layer harder to spot than classic shadow IT.

The risk profile also changes. Shadow IT typically created blind spots around software versions, access controls, and data storage. Shadow AI adds new failure modes: sensitive data can be included in prompts; outputs can be wrong but convincing; and automated “agent” features can take actions that ripple into other systems. The upshot is that security teams can lose oversight not just of apps, but of decisions.

Why bans tend to backfire

Blanket bans are tempting, especially after high-profile data leaks. But they often push usage underground, degrade reporting culture, and leave leadership with a false sense of security. A more durable approach treats shadow AI as a signal: employees are reaching for new tools because existing processes feel too slow, too manual, or too restrictive.

That is why many guidance documents now emphasise “responsible enablement”—creating clear paths for safe use, not only prohibitions. The EU’s own cybersecurity actors have taken a similar line. In its guidance on generative AI in cybersecurity, CERT-EU argues for actionable internal policies, staff awareness, and controls that keep sensitive data out of public models while organisations still benefit from productivity gains.

Regaining control without slowing innovation: a practical playbook

Security teams trying to “catch up” to shadow AI often start with a simple truth: you cannot govern what you cannot see. But visibility alone is not enough. The goal is to build a safer default environment where employees do not need to improvise.

1) Build an inventory of AI use—especially inside “approved” tools

Start by mapping where AI exists today: chatbots, copilots, meeting transcribers, design tools, coding assistants, and AI features inside common SaaS platforms. Include both IT-approved tools and “bring-your-own” usage. Many organisations discover they already have AI features enabled across products purchased years earlier.

2) Define “safe data” for prompts—then enforce it

Most AI governance fails at the prompt boundary. If staff can paste personal data, customer records, or confidential business material into a model with unclear retention or training terms, the organisation may be taking on avoidable exposure. Guidance from EU bodies increasingly recommends clear data-handling rules—what can be shared, what cannot, and how to redact or summarise safely.

For teams looking for structured risk thinking, the NIST AI Risk Management Framework (AI RMF 1.0) offers a governance approach built around mapping context, measuring risk, and managing controls—useful even for organisations that are not building their own models, but deploying them.

3) Offer approved alternatives that are genuinely usable

If employees turn to shadow AI because the official route takes weeks, governance will lose. Many organisations now provide an approved “AI workspace” (or a small set of sanctioned tools) with clearer contractual terms, logging, and stronger privacy settings. The key is usability: if the approved option is slower, blocked, or underpowered, shadow usage will return.

4) Put guardrails around integrations and “AI agents”

As AI moves from text generation to action—booking meetings, modifying code, sending emails, updating tickets—the risk is no longer only data leakage. It becomes process integrity. Controls should focus on least privilege, approval steps for high-impact actions, and strong audit logs. The French national cybersecurity agency ANSSI, for example, recommends traceability and security-by-design measures for generative AI systems, including logging and separation of environments in its security recommendations.

5) Treat vendors and procurement as part of the security perimeter

Shadow AI thrives when teams can purchase tools directly, or when AI features arrive silently through updates. Procurement and security need shared checklists: data retention, model training exclusions, regional hosting options, access controls, auditability, and incident response commitments. This is especially relevant in Europe, where regulatory expectations around accountability are rising.

6) Make training practical, not abstract

Training works when it matches how people actually use tools: “Here’s what not to paste,” “Here’s how to summarise sensitive content,” “Here’s how to verify outputs,” “Here’s when to use approved tools,” and “Here’s who to contact for fast review.” The aim is to turn employees into informed participants in security, not accidental violators.

The European context: governance is now a competitiveness issue

Europe’s regulatory direction is clear: more accountability for how AI is deployed, and more scrutiny over data and rights impacts. The EU Artificial Intelligence Act establishes a risk-based framework for AI, with stricter obligations for certain high-risk uses and clearer responsibilities across the AI value chain. For organisations, that means shadow AI is not just a technical concern—it can become a compliance issue if uncontrolled tools are used in sensitive contexts such as hiring, credit, education, or essential services.

Meanwhile, privacy expectations are sharpening. The European Data Protection Supervisor has published updated guidance on generative AI and data protection, highlighting the need to keep safeguards aligned with a rapidly evolving ecosystem. See the EDPS page and downloadable document: Guidance on Generative AI (EDPS).

In that wider policy environment, “move fast and break things” is a costly posture. For security teams, the emerging job is to create a controlled runway for innovation: quick approvals, clear safe-use rules, and technical guardrails that scale.

What to watch next

Shadow AI is likely to grow as AI becomes a default feature across office suites, customer platforms, and developer tooling. Analysts have warned that unauthorised AI use is becoming a measurable security and compliance risk in enterprises, increasing pressure on organisations to educate staff and formalise policies. The organisations that adapt fastest may be those that stop treating governance as a brake—and start treating it as product design for internal users.

That is the core message behind the Technology.org framing: security teams can regain control, but only if they build systems that make the safe path the easy path.

Related background: The European Times has previously tracked the EU’s regulatory trajectory as the European Artificial Intelligence Act comes into force.