What is Shadow AI?

Shadow AI is unsanctioned use of AI tools or features inside SaaS apps. It occurs when employees enable new AI capabilities or adopt AI apps without IT review or formal vetting, creating unmanaged identities and data exposure across cloud services.

How Prevalent is Shadow AI?

According to Grip's 2025 SaaS Security Risks Report:

• 91% of AI tools in use are unmanaged by security or IT teams.
• AI adoption is outpacing security governance by a 4:1 margin. 80% of shadow AI apps that could be federated are not.
• 96% of organizations show ChatGPT presence, despite bans; blocking alone drives workarounds and more shadow AI.

These findings show AI is embedding into SaaS faster than controls can keep up, widening the visibility and governance gap.

Read the full report for more on shadow AI and shadow SaaS.

Shadow AI Risks  

Unapproved AI tools can:

• Expose sensitive data (files, source code, customer records) through uploads, prompts, or background indexing.
• Break compliance when data leaves approved systems or is retained for model training.
• Duplicate spend and effort, fragment workflows, and increase operational risk.

The Identity and Access Risks of Shadow AI

The danger isn’t only the app—it’s who it connects as and what it’s allowed to do. Common risk patterns:

• Untracked identities & accounts created outside SSO (shadow identities).
• Over-permissioned OAuth scopes and long-lived tokens that grant broad data/API access.
• Data persistence outside the boundary, including AI-generated content and training artifacts.

Shadow AI compounds shadow SaaS, expanding a web of users, apps, scopes, and data flows that evade traditional controls.

‍

Can Shadow AI Be Stopped?

Shadow AI starts with good intentions: speed, insight, and automation, enabled in clicks and spread across departments. Stopping it begins with visibility.

How Grip helps‍

Grip discovers AI tools and newly enabled AI features, maps who owns them, analyzes permissions/scopes and data access, and recommends next actions (e.g., SSO/MFA enforcement, scope reduction, token revocation, or access removal). You regain control without stifling innovation. See how Grip reduces shadow AI risks, then take the next step and book a demo with our team.

Frequently Asked Questions

What is shadow AI in cybersecurity?

Shadow AI in cybersecurity is the unsanctioned use of AI tools or AI features in SaaS apps without IT/security approval, creating blind spots in identity, access, and data protection.

How does shadow AI happen in a SaaS environment?

Shadow AI typically emerges when employees or teams adopt new AI tools to automate tasks, analyze data, or enhance productivity, without going through formal review processes. It also occurs when users activate AI features in SaaS apps that were previously approved in a non-AI form, bypassing renewed risk assessment.

Why is shadow AI a security risk?

Unapproved AI tools can access or store sensitive data, create unmonitored accounts, and introduce unauthorized access pathways. Without visibility into how AI tools handle data or interact with other services, organizations face increased risk of data leaks, compliance violations, and unmonitored identity exposure.

What data is most at risk from shadow AI?

‍Shadow AI tools may interact with corporate documents, customer records, source code, financial data, or employee credentials. When these tools are not reviewed for data protection practices, they can lead to unintended data sharing or AI model training on sensitive content.

How can organizations detect and manage shadow AI?

To manage shadow AI risk, organizations need tools that automatically detect unauthorized AI tools and SaaS apps in use. Solutions like Grip help detect when a new AI tool enters a SaaS environment, who it belongs to, the risk severity of it, and recommended actions to take next, such as applying controls like SSO, MFA, or revoking access entirely. Learn more about Grip's shadow AI detection and management capabilities.

Related Content

Free Guide: Modern SaaS Security for Managing GenAI Risk

AI Apps: A New Game of Cybersecurity Whac-a-Mole

5 Steps to Detect and Control Shadow IT

When Does Shadow IT Become Business-Led IT