Shadow AI workplace use: what it actually looks like
The AI you approved and the AI your people use are rarely the same list. Shadow AI is the second one: tools used for work without anyone in charge having chosen, reviewed or even heard of them. It is the AI cousin of the personal Dropbox and the WhatsApp group for rostering.
The cause is nearly always mundane. A tool saves twenty minutes, nobody has said no, and asking permission feels like more effort than not. Treating it as defiance misreads it. Treating it as invisible is worse, because the information flowing through these tools is often exactly the information you promised clients you would protect.
Four places account for most of it: personal accounts, browser extensions, meeting recorders, and features that arrive inside software you already own.
Shadow AI is not a verdict on your people. It is a signal that the tools you provide, or the speed at which you decide, do not match how work gets done. A receptionist who uses a chatbot to draft polite replies to difficult emails is solving a real problem. The useful question is what the business should provide so the workaround is not needed.
Personal accounts
This is the commonest one. Someone signs up to a chatbot with their own email and uses it for work. The business cannot see what was entered, cannot set retention, cannot remove access when the person leaves, and cannot show a client or insurer what happened.
Terms differ between vendors and between consumer and business plans, and they change. Some consumer plans use conversations to improve their models unless the user switches that off. Others do not. The point is not to memorise the terms but to recognise that on a personal account you did not choose them and cannot check them.
The honest fix is a business account on a tool whose terms you have read, with the admin settings looked at, so the easy path and the safe path are the same path.
Another practical point: when the person leaves, so does the history. Notes, prompts and drafts built up in a personal account may hold business knowledge that now belongs to nobody, and you cannot export or erase it.
Browser extensions
Writing helpers, page summarisers, email assistants and 'AI sidebar' tools are installed in two clicks from the browser store. Many request permission to read and change the content of every website the person visits. That can include the practice management system, the client portal, webmail and the internal wiki.
Extensions are updated by their developers, sometimes change hands, and are rarely reviewed after install. A tidy little grammar tool from last year may not be the same product today.
If you manage company laptops, your IT provider can usually see or restrict installed extensions. If you do not, an extension list is something you can ask people to check on their own machine as part of a general tidy-up, without turning it into an inspection.
Ask a basic question about each extension: would I be comfortable with the developer reading everything on this screen? If the screen is the client portal, the answer is probably no.
Meeting recorders and AI notetakers
These deserve their own heading because they touch other people's information, not just your own. A notetaker may join a call as a participant, or run quietly on a laptop. It records and transcribes everyone, including clients, suppliers, candidates and the person on the other end who never agreed to anything.
Think about the calls where this matters: client advice, performance conversations, board or partner meetings, anything involving a health or financial situation, anything where privilege or confidentiality is expected. Transcripts are stored with the vendor, and summaries are often emailed automatically to everyone on the invite, including people outside your business.
Rules about recording conversations differ across Australian states and territories, and consent expectations vary again for New Zealand. Do not guess. A sensible house rule is that only the approved tool may record, the person running the meeting says so at the start, and anyone can ask for it to be switched off.
A related risk is tools that connect to your accounts. A scheduling or email assistant may ask to read your whole mailbox and calendar, and that access can persist after the person stops using it. Part of a regular tidy-up is revoking connections that are no longer in use.
AI features switching on inside software you already own
Your email, document suite, accounting package, CRM and helpdesk platform have probably added AI features in the last couple of years, some on by default, some as paid extras that a staff member trialled. These are not shadow in the strict sense, but they behave like it when nobody has looked at the settings.
Ask each major vendor, or your IT provider, a short set of questions: what AI features exist in our plan, which are enabled, what data do they process and where, and can the admin turn them off by role? Defaults and plan differences change often, so write down the date you checked.
Look at it from the other direction too. When a vendor announces a new assistant, ask whether it will be switched on automatically for your organisation or needs an admin to enable it. A standing quarterly reminder to check release notes for your main platforms is enough.
How to find what is there
Do not rely on technical checks alone. A tool can be invisible to the admin console and still be widely used, for example on a phone. Honest conversation fills in what logs cannot. The reverse is also true: people forget, so logs help check recollection.
No single method sees everything. Use several, and be open about it with staff, because covert monitoring costs more in trust than it gains in information.
- Look at third-party app consents in your Microsoft 365 or Google Workspace admin console, which usually list apps that people have granted access to their work account.
- Review browser extensions on managed devices.
- Scan card statements and expense claims for AI subscriptions.
- Ask your IT provider what they have seen on the network and in security logs.
- Ask staff directly, and give them a way to answer anonymously. Calibre Forum's survey does this and returns a tool register of what people say they use, personal accounts included, shown to the owner only in groups of three or more.
Keep a simple list: tool, purpose, account type (business or personal), who uses it, what information it touches, approved or not, and the date you last reviewed it. You will not get it right the first time. A register that is roughly right and updated every few months is worth more than a perfect one that never appears.
What to do once you have a list
Triage by three things: what information goes in, whether the account is personal or business, and what the vendor's terms say. A writing helper that sees only your own draft text is a very different case from a notetaker that records client meetings.
Then prefer replacing to removing. For each tool that is genuinely useful, find an approved way to do the same job. For the rest, tell people plainly what is stopping and why, and give a date.
Tell staff that being open about what they use will not be held against them. If the first people to be honest get a telling-off, the next survey will be empty. Review the register every quarter, or whenever a new tool is requested.
Write a one-line rule for each of the four categories so staff know where they stand. Personal accounts: business accounts only for work. Extensions: ask first. Recorders: approved tool only, announced at the start. Built-in features: the admin decides, and the register records it.
Common questions
What is shadow AI?
Shadow AI is AI tool use at work that the business has not approved, reviewed or in many cases even noticed. Examples include staff using personal chatbot accounts, installing browser extensions with AI features, or running meeting recorders. The term borrows from shadow IT, where staff use unapproved software or cloud storage to get work done.
Is shadow AI the same as shadow IT?
It is a close relative. Shadow IT covers any unapproved technology, such as personal file-sharing. Shadow AI is the subset where the tool processes and often stores the content people enter, and may learn from it. That makes the question of what information goes in more pressing than it is for, say, an unapproved calendar app.
Are AI meeting recorders legal in Australia?
It depends on the circumstances. Rules on recording conversations vary between states and territories, and consent usually matters. Contracts and professional duties can add restrictions. Get advice for your situation, and as a safe default announce recording at the start, use only an approved tool, and avoid it for sensitive or privileged conversations.
How do I detect shadow AI without spying on staff?
Combine open methods: admin console reports on app permissions, a review of extensions on managed devices, subscription checks, and an anonymous staff survey. Tell people what you are looking at and why. Aim to find tools, not to monitor individuals, and say explicitly that honest answers will not lead to punishment.
This guide is general information, not legal, insurance or financial advice. Check your own obligations with a qualified adviser.