"Shadow IT" has been a problem for decades—employees swiping credit cards to buy SaaS tools without IT approval. But "Shadow AI" is different, and arguably more dangerous. It isn't just about unapproved software; it's about unapproved reasoning.
When an employee is stuck on a strategy memo and asks ChatGPT to "rewrite this to be more punchy," or pastes a chunk of Python code to "find the bug," strictly speaking, they have just exported company IP to a third party. They didn't do it to be malicious; they did it to be productive. And that is the problem.
The Futility of "Blocking"
The first instinct of many IT departments is to block the domains. "Block openai.com. Block claude.ai." This fails 100% of the time. Employees will simply use their personal phone, their iPad, or home computer. They know these tools verifyably save them hours of work, and they will not give them up.
By blocking it, you don't stop the usage; you just make it invisible. You lose all visibility into what data is leaking.
The Solution: Enterprise Gateways
The only way to tame Shadow AI is to provide a better, safer alternative. Smart companies are building or buying "Internal AI Gateways."
These are branded, internal chat interfaces (e.g., "CorpGPT") that wrap around the public models via secure APIs. To the employee, it looks and feels like ChatGPT. But the backend has crucial differences:
- Zero Retention: The contract ensures data isn't used for training.
- PII Masking: A filter layer automatically redacts names, SSNs, and credit card numbers before they are sent to the model.
- Logging: The company has an audit trail of who is asking what.
When you give employees a safe tool that works, they stop using the unsafe one. Security through utility is the only path forward.