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Shadow AI is the $670,000 problem most organizations don’t even know they have.
IBM’s 2025 Cost of a Data Breach Report, released today in partnership with the Ponemon Institute, reveals that breaches involving employees’ unauthorized use of AI tools cost organizations an average of $4.63 million. That’s nearly 16% more than the global average of $4.44 million.
The research, based on 3,470 interviews across 600 breached organizations, reflects how quickly AI adoption is outpacing security oversight. While only 13% of organizations reported AI-related security incidents, 97% of those breached lacked proper AI access controls. Another 8% weren’t even sure if they’d been compromised through AI systems.
“The data shows that a gap between AI adoption and oversight already exists, and threat actors are starting to exploit it,” said Suja Viswesan, Vice President of Security and Runtime Products at IBM. “The report revealed a lack of basic access controls for AI systems, leaving highly sensitive data exposed and models vulnerable to manipulation.”
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Shadow AI, supply chains are the favorite attack vectors
The report finds that 60% of AI-related security incidents resulted in compromised data, while 31% caused disruptions to an organization’s daily operations. Customers’ personally identifiable information (PII) was compromised in 65% of shadow AI incidents. That’s significantly higher than the 53% global average. One of AI security’s greatest weaknesses is governance, with 63% of breached organizations either lacking AI governance policies or are still developing them.
“Shadow AI is like doping in the Tour de France; people want an edge without realizing the long-term consequences,” Itamar Golan, CEO of Prompt Security, told VentureBeat. His company has cataloged over 12,000 AI apps and detects 50 new ones daily.
VentureBeat continues to see adversaries’ tradecraft outpace current defenses against software and model supply chain attacks. It’s not surprising that the report found that supply chains are the primary attack vector for AI security incidents, with 30% involving compromised apps, APIs, or plug-ins. As the report states: “Supply chain compromise was the most common cause of AI security incidents. Security incidents involving AI models and applications were varied, but one type clearly claimed the top ranking: supply chain compromise (30%), which includes compromised apps, APIs and plug-ins.”
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