Shadow AI: the new shadow IT

Shadow IT is familiar territory: Software that departments purchase themselves, bypassing IT and procurement. With the rise of AI tools, a new variant has emerged, growing faster and carrying greater risks.

What is shadow AI?

A marketing team subscribes to a writing assistant, a developer uses their own code assistant, a department pays for an AI minute-taker during meetings. Each individually a small amount, often via credit card or expense claim. Together a significant and invisible cost item.

Why the risk is greater than with ordinary shadow IT

• Your data leaves the organisation. Employees paste customer data, contracts, or source code into an AI tool. With consumer subscriptions, it is often unclear what the provider does with that data.

• Contract terms are missing. Agreements on data location, retention periods, and whether your data is used for training can only be properly arranged in business contracts.

• Double costs. Much existing Software receives AI functions as a paid add-on, while departments are meanwhile buying separate tools that do the same thing.

How to get control?

1. Map what is being used. Don't only look at IT contracts, but also at credit card statements and expense claims.

2. Choose a standard for each application. Offer employees a good alternative instead of just prohibiting; a ban without an alternative only worsens the problem.

3. Negotiate business terms. Establish that your data will not be used for training, where data is stored, and how you centrally manage licenses.

4. Include AI in your renewals. Check at each renewal which AI features are included in your existing Software, so you don't pay twice.

How SoftVaro helps

SoftVaro maps your Software landscape, including tools purchased outside IT. With the Software manufacturers you want to retain, we negotiate business terms.