Shadow AI: The Costly Consequences Are Coming

Despite its popularity, shadow AI is ranked third highest in adding costs to data breaches, just behind Supply Chain breaches and complex security systems. It adds $200,321 annually, which includes regulatory fines, legal fees, downtime, and remediation costs. In IBM’s Cost of a Data Breach Report 2025, 20% of respondents reported data breaches involving shadow AI. However, only 37% of companies had policies for shadow AI management and detection.

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