I hadn’t heard the term “shadow AI” before, but I think it’s a very useful addition to the tech lexicon. I came across it while reading about a first-of-its-kind filing by a US bank (CB Financial, the parent of Community Bank) concerning an incident where an employee fed customer data into an unapproved AI application. A law firm called it the first filing to blame a material cybersecurity incident on “shadow AI”, meaning AI tools that employees use without their employer’s approval.
It goes without saying that the use of shadow AI is already widespread and I don’t doubt that people use it all the time. But what do they use it for?
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KPMG partner fined £5,000 for using AI to cheat on AI test
A senior member of the Big Four accountancy firm in Australia uploaded training material on artificial intelligence to an AI platform to answer exam questions
From: KPMG partner fined £5,000 for using AI to cheat on AI test.
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Our data shows that AI use at work is a little messy.
There are gentle tailwinds in the workplace: LLM licenses are bought, training sessions are offered, encouragement from the C-suite is given. But the headwinds are stronger: IT and AI governance; a restricted, limited version of the LLM; reputational risk; fear of AI in general, losing jobs to AI, contravening company policy, looking like you’re cheating.
As a result, “shadow usage” is common. One user reports: “I’m closing tickets 2x faster, my code reviews have fewer issues, and I got praised in my last performance review. But here’s the thing: nobody knows I’m using AI.”
Another wrote: “I built an AI agent to replace myself secretly. Like 50% of the jobs. I used to bring it up to management the way to do it, so the entire org got the benefit. They end up not buying my idea…now I [am] just doing all of these secretly [sic] and spend the spare time on my own side business.”
We see AI mostly being used to achieve modest, uncontroversial wins, some applications in sales and very few where business processes are being fundamentally rethought.
From: How People Are Really Using AI in 2026.
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