What is shadow AI, and what does it cost?
Shadow AI is the use of AI tools at work without the company's approval or oversight: personal chatbot accounts, unapproved agents, company data pasted into tools nobody reviewed. It costs money when that data leaks, and it costs control, because the company cannot see what its own information is feeding.
Last updated 25 October 2026 · Mert Uzun, co-founder
Why it matters
1 in 5
organizations was breached through shadow AI. (IBM, Cost of a Data Breach 2025)
$670K
About that much more per breach for organizations with high levels of shadow AI. (IBM, Cost of a Data Breach 2025)
$4.44M
The global average cost of a data breach in 2025. (IBM, Cost of a Data Breach 2025)
How it works in practice
People use AI because it saves them time. When the approved tools cannot reach company knowledge, they paste that knowledge into tools that can.
Banning the tools rarely works. The work still needs answers, so the copying moves out of sight.
The fix is to make the safe path the easy one. Give the agents people already like answers from company knowledge, limited to what each person can access.
Then there is nothing to paste. The data stays in the company's own cloud, and every answer has a source.
How Mithrandir does it
Runs in your own cloud with your own model key, so company data stays inside.
Works inside the agents people already choose: 20 agents over MCP.
Each person sees only what they can already access at work. 0 leaks across 30,000+ entries.
Questions
- How common is shadow AI?
- Common. In IBM's Cost of a Data Breach 2025, 1 in 5 organizations was breached through shadow AI.
- Should we ban personal AI tools?
- A ban leaves the need in place. People still need answers from company knowledge, so the copying continues where nobody can see it. A sanctioned path inside the agents they already use removes the reason.
- What does a breach cost?
- IBM puts the global average at $4.44M in 2025, and about $670,000 more per breach where shadow AI is high.
- How does a company memory reduce shadow AI?
- It gives people's own agents safe answers from company knowledge, each person limited to their access. With nothing to paste, company data stays in the company's cloud.
