Shadow AI: The rise of a cybersecurity threat from unauthorised AI use

Global data breach costs in 2025 declined for the first time in five years, dropping to an average $4.44 million due to containment driven by AI-powered defences, according to a new report.  In India, such costs increased from $2.35 million last year to $2.51 million in 2025. Shadow AI, the unauthorised use of artificial intelligence tools, models, or platforms, is emerging as a new threat, according to IBM’s annual ‘Cost of Data Breach’ report. It studied 600 organisations impacted by data breaches between March 2024 and February 2025. 

Dropping their guard  *  1 in 5 organisations that suffered a cyberattack blame shadow AI for the breach  *  97% of organisations that suffered AI-related breach lacked proper AI access controls  *  $670,000 added cost of shadow AI to avg breach price  *  49% of organisations investing in security post-breach  *  63% Organisations say they lack AI governance policies or are still developing one  Investing in safety  -  $1.9 mn Average cost savings from use of AI in security  -  $4.44 mn Global average cost of data breach in 2025  -  9% drop in cost of breach from last year ($4.88 mn)