TrustedTech: Executives Drive Shadow AI Risk in Enterprises

TrustedTech has released new research indicating that senior leaders are among the biggest sources of shadow AI risk within organizations, with executives using unapproved AI tools at significantly higher rates than lower-level employees.

The Irvine, California-based Microsoft cloud solutions and IT modernization provider said its global and U.S. data points to a growing gap between enterprise AI governance policies and actual behavior at the leadership level.

For MSPs and CSPs, the findings point to a services opportunity around AI governance, licensing strategy, usage visibility, and Copilot readiness as customers try to reduce shadow AI without slowing adoption.

Executives use unapproved AI tools at higher rates

According to TrustedTech, 65% of global decision-makers and 67% of U.S. decision-makers at the same level use unapproved AI tools at work. That is more than double the rate of employees below the decision-maker level.

The report also found that 48% of global respondents use unapproved AI tools at work, rising slightly to 49% among U.S. respondents.

“It’s just crazy that the people who are responsible for crafting the policies for AI in their organizations are the ones who are breaking it,” Andy Nolan, the provider’s vice president of technology, told Channel Insider.

“Shadow AI” refers to the use of AI tools, applications, or services without approval from an organization’s IT, security, or compliance teams. 

For managed service providers and IT leaders, the trend creates new challenges around data protection, access control, compliance, and visibility across customer environments.

“We have a responsibility to take good care and be data stewards for our customers’ data,” Nolan said. 

Awareness of AI risk is not stopping risky behavior

TrustedTech’s research found that 77% of employees acknowledge security or data privacy risks associated with unapproved AI use, but this awareness has not meaningfully changed behavior.

The contradiction is especially pronounced among senior leaders. The report found that 56% of global decision-makers and 60% of U.S. decision-makers are concerned about employees using shadow AI, even though decision-makers are also the most frequent users of unapproved tools.

“The fact that these people were aware of it, and they still went ahead and did it, that is really, really crazy to me,” said Nolan.

“I think it is that fear of being left behind,” Nolan continued. “If I don’t use this, someone else is going to. They’re gonna get their work done twice, three times, four times as fast as me, and I’m gonna look bad.”

Shadow AI creates governance and compliance gaps

The report also found that 42% of decision-makers are concerned their own AI usage is being monitored, compared with 23% of junior employees. 

In addition, 21% of global shadow AI users said they use unapproved tools because they do not want their organizations to see or access their data.

For IT channel partners, those findings point to a growing opportunity to help customers establish AI governance frameworks, monitor AI usage, and reduce exposure to data leakage or compliance violations.

“This isn’t about stopping AI adoption, it’s about bringing structure to something that’s already happening,” said TrustedTech’s founder, Julian Hamood. “Companies need visibility into how AI is being used across every level of the organization, especially at the leadership level, where the impact of decisions is the greatest.”

How TrustedTech is guiding customers through Copilot adoption

As a Microsoft-focused CSP and services partner, TrustedTech is helping customers of all sizes navigate Copilot adoption and broader AI integration across business workflows.

Nolan said the shadow AI documented by the provider in its research is part of a wider problem many business leaders face: visibility and ownership.

“The shadow AI portion of this is more of a symptom of a larger problem of just not really having a good handle on your environment and your users’ behaviors in their usage,” Nolan said.

He added that for TrustedTech, the efficiencies and productivity gains promised by AI tooling have only showcased the importance of understanding how people operate within a business. 

The provider builds AI readiness programs for its clients by going back to basics.

“It’s really just spending time with people, actually talking to them, and really just understanding what the state of their day-to-day work is, and then how to make it work with the whole business.”