Shadow AI: The Hidden Challenge and How Reco Plans to Illuminate It

In the fast-paced landscape of artificial intelligence, a significant yet often overlooked issue is emerging: shadow AI. This phenomenon occurs when employees use AI technologies without authorization or oversight, creating a hidden network of tools that access company data without security measures in place. As AI adoption speeds up in workplaces, companies are scrambling to manage the risks associated with this invisible sprawl.

Dr. Tal Shapira, co-founder and CTO of Reco, a company that specializes in AI governance and security, has pointed out that this trend poses one of the biggest threats to organizations today. He noted, “We went from ‘AI is coming’ to ‘AI is everywhere’ in about 18 months, and governance frameworks simply haven’t caught up.”

The Stealthy Threat in Our Systems

Shapira explains that traditional corporate security systems were designed for a time when everything was contained behind firewalls. Shadow AI disrupts this traditional model. Many AI tools now seamlessly integrate with everyday SaaS platforms such as Salesforce and Slack. While these integrations can boost productivity, they also create vulnerabilities. Many of these connections remain active even after the original user has left the organization, allowing ongoing, unmonitored access to company data.

“The deeper issue is that these tools embed themselves in the company’s infrastructure, often for months or even years without detection,” Shapira cautioned. The unpredictable nature of AI—being probabilistic rather than command-based—adds another layer of complexity. Its actions can vary widely, making them harder to control and monitor effectively.

When AI Makes Mistakes

The consequences of shadow AI are already becoming alarmingly clear. In one striking example, a Fortune 100 financial firm, believing its systems to be secure, discovered more than 1,000 unauthorized integrations in its environments, many of which were AI-driven. One such integration, a transcription tool for Zoom, recorded sensitive conversations, unknowingly training a third-party AI model on confidential data.

Another case involved a connection between an employee’s ChatGPT account and Salesforce, which enabled the AI to produce numerous internal reports in a matter of hours. While fast, this action inadvertently exposed sensitive customer data and sales forecasts to external systems.

How Reco Identifies Hidden Threats

Reco is tackling the issue head-on with its platform that provides full visibility into the AI tools connected to company systems and the data these tools can access. The system consistently scans SaaS environments for OAuth grants, unauthorized apps, and browser extensions, presenting admins with useful insights about user permissions and potential risks.

“If a connection appears risky, the system can alert administrators or automatically revoke access,” Shapira added. With AI capable of extracting vast datasets quickly, timely alerts are crucial. Unlike traditional security tools that focus on network boundaries, Reco’s approach centers on identity and access management, which is vital in a cloud-first world.

A Broader Security Wake-Up Call

This trend highlights a larger movement within enterprise security: shifting from blocking AI to effectively governing it. According to a recent Cisco report, as many as 62% of organizations reported lacking visibility into how employees utilize AI at work, and nearly half have experienced AI-related data issues.

As AI features become integrated into popular software—think Microsoft Copilot or Salesforce’s Einstein—the risks grow. “You might trust a platform, but you may not realize its AI features are accessing your data automatically,” Shapira warned. Reco aims to bridge this gap, enhancing oversight on AI activity within organizations.

Securely Embracing AI

Shapira believes we're entering an era where every business tool will involve AI, whether or not we can see it. This reality necessitates continuous monitoring, access restrictions, and ephemeral permissions. He emphasizes that the best-performing companies won’t simply block AI; they’ll find ways to adopt it safely with robust measures that maintain both innovation and trust.

In the quest to optimize AI while safeguarding data, Reco’s message resonates loud and clear: you cannot secure what you cannot see.