- 'Shadow AI' refers to employees' unauthorised use of AI tools, with 81% admitting to sharing confidential business information via public AI platforms
- One-third of Australian businesses use free generative AI tools, but only 10% of managers believe their teams are trained to use it safely
- Most common workplace AI uses include responding to communications, drafting reports and presentations, and financial tasks, particularly in IT, Sales, Marketing, Engineering and Finance sectors
- Security teams face increased burnout from defending against both AI-powered attacks and internal AI misuse by employees
- Experts recommend implementing company AI policies and developing in-house AI solutions to maintain data security and establish proper usage boundaries
The term ‘Shadow AI’ is the latest hidden cyber threat lurking within Australian businesses and in fact being conducted by their very own employees not external hackers.
Shadow AI refers to the use of artificial-intelligence tools especially generative AI tools commonly used by employees without formal approval, oversight or governance from their organisations or governing IT security compliance systems.
According to a September study by HP and Microsoft, 81% of employees using AI tools admit to sharing confidential business information via these public AI platforms and about 1 in 5 global cyber-infractions are now linked to unauthorised AI use.
It also revealed that the most common tasks employees use consumer AI for are to respond to workplace communications, draft reports and presentations alongside carrying out finance related tasks.
“The recent research conducted by HP and Microsoft shows that businesses really need to pivot fast towards enterprise solutions that protects them from a security and data standpoint, it is simply risk-taking that businesses cannot afford,” said Mr. Kosala Aravinda, Chief Operations Officer for Blockstars Technology.
1 in 3 Australian businesses are using free generative AI tools and more than 50% of small medium enterprises have introduced AI into their operations however, only 1 in 10 managers believes that their teams are trained to use it safely.
“The first thing businesses can do right now is set their own AI policy on how to safeguard their company on how employees can use these online AI platforms,” said Mr. Aravinda.
AI is already accelerating burnout among security teams who are defending against AI-powered attacks and internal misuse of AI by their own employees reported Australian Cybersecurity Magazine.
Whilst employees and businesses are saving money and time using these free tools, the cyber security threat and data misuse of company information threatens Australian businesses posing a significantly larger risk with a far more costly consequence.
Convenience and familiarity are the key reasons businesses and employees turn to public AI being unaware of alternatives that could protect their business.
They also state that AI use is most common amongst employees within IT & Telecoms, Sales, Media & Marketing, Architecture & Engineering and Finance & Insurance sectors.
“The key advice I would urge to any Australian business actively integrating and using AI in their operations right now is to integrate their own In-House AI Agent. This can be developed and tailored to your business, where employees can use it freely, all information can be kept securely within legal framework and you can clearly set a boundary on how to use AI within your company,” said Mr. Aravinda.
About us:
Blockstars Technology is a leader in AI solutions, dedicated to helping industries harness the power of Artificial Intelligence securely and responsibly. By combining cutting-edge technology with a focus on data privacy, sovereignty, and ethical AI practices, Blockstars Technology empowers Australian businesses to thrive in the digital age.
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