This guide covers what shadow AI is, how it spreads inside organizations, and the serious risks it creates. Shadow AI vs. shadow ITShadow IT is the broader term for any software or hardware used without an organization’s approval or oversight. Shadow AI is a specific form of shadow IT involving AI systems and AI-powered features. Organizations with high levels of shadow AI faced breach costs averaging $670,000 more than those with little or no shadow AI. How to reduce shadow AI risksReducing shadow AI requires practical alternatives, clear policies, appropriate access controls, employee training, and ongoing review.