As AI adoption grows, so does the risk of shadow AI

India’s software outsourcing industry is globally recognised for its scale, expertise, and cost efficiency. It has evolved from basic IT to high-end services like AI, cloud, and cybersecurity, and now holds over 50-59% of the global IT outsourcing market. However, the rapid rise of “Shadow AI” – the use of unauthorised, unmonitored artificial intelligence (AI) tools by employees – is posing a significant threat to the industry. While designed to boost productivity, this trend creates critical vulnerabilities that threaten the industry’s reputation for data security, compliance, and reliability.