Shadow AI is already here: Take control, reduce risk, unleash innovation
Generative AI is transforming how work gets done, but not always within the boundaries of enterprise oversight. As employees increasingly turn to external AI tools to boost productivity and bypass outdated systems, a new reality is emerging: shadow AI. The unsanctioned use of AI is no longer fringe behavior. It has become mainstream, pervasive, and often invisible to leadership. While it introduces real risks, it also reflects a workforce that is eager to innovate. This paper explores how organizations can move beyond reactive controls and adopt a proactive strategy. Such an approach reduces risk, builds trust, and transforms shadow AI into a powerful engine for innovation and growth.
Shadow AI is already here: Take control, reduce risk, unleash innovation
Discover how forward-thinking organizations are turning unsanctioned AI use into a launchpad for innovation and growth. Learn how to reduce risk, empower employees, and build a future-ready AI strategy.
Shadow AI is surging, and most organizations aren’t ready
Shadow AI has gone mainstream, driven by a workforce eager to innovate faster than enterprise systems can keep up.
As employees embrace generative AI to boost productivity and bypass outdated systems, unsanctioned use is becoming the norm. The data reveals just how widespread, and risky, this behavior has become.
Shadow AI isn’t a fringe issue—it’s a signal that employees are moving faster than the systems designed to support them. Without trusted oversight and a coordinated architectural strategy, even a single shortcut can expose the organization to serious risk. But with the right guardrails in place, shadow AI can become a powerful force for innovation, agility, and long-term competitive advantage. The time to act is now—with clarity, trust, and bold forward-looking leadership.
Swami Chandrasekaran
Principal, US and Global AI and Data Labs leader at KPMG
From liability to launchpad
Without oversight, even one shortcut can trigger a brand crisis. But with the right approach, you can turn risk into a strategic asset.
Employees can rapidly test new ideas and workflows without waiting on approvals, surfacing high-impact use cases organically.
The tools employees choose reveal friction points in existing AI systems, highlighting where modernization and upgrades are required.
Hands-on use of GenAI tools builds prompting, goal automation, and critical thinking skills—boosting AI fluency on the job.
Shadow AI often emerges in problem-solving teams that span business and technical roles, fostering collaboration across silos and surfacing novel use cases.
Shadow AI is already here: Take control, reduce risk, unleash innovation
Discover how forward-thinking organizations are turning unsanctioned AI use into a launchpad for innovation and growth. Learn how to reduce risk, empower employees, and build a future-ready AI strategy.
How KPMG can help
KPMG AI Trust services help organizations turn shadow AI from a risk into a strategic asset through governance, technology, and workforce transformation using the following tools and solutions:
- Trusted AI governance
We help design centralized AI governance programs that align with enterprise goals. This includes:- Establishing AI policies and review boards
- Ensuring compliance with ethical and regulatory standards
- Developing agentic AI guidelines and policies
- Scalable technology and inventory solutions
We support the discovery, oversight, and secure deployment of AI tools by:- Implementing AI inventory and governance systems
- Automating AI testing and compliance reporting
- Creating secure environments for AI experimentation and scaling
- AI intake and monitoring
To manage AI effectively, we:- Build streamlined intake processes for new AI tools
- Implement automated discovery and monitoring systems
- Offer curated, role-specific AI tools within governance boundaries
- AI-enabled workforce
We help organizations prepare their people for AI by:- Integrating AI agents into workflows
- Redefining roles and governance to support AI collaboration
- Delivering training to foster a culture of responsible AI use
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