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Shadow AI Continues to Expose Company IP

By Linn Foster Freedman on May 28, 2026
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Verizon recently published its 2026 Data Breach Investigations Report, which is full of helpful information for cybersecurity professionals to implement strategies for protection of systems. For a summary, click here.

The Report notes that a whopping “67% of users are using non-corporate accounts on their corporate devices to access AI services” and “45% of employees are now considered regular users of AI (authorized or not) on their corporate devices.” Verizon’s data shows that “Shadow AI is now the third most common non-malicious insider action detected…a fourfold increase in percentage from the previous year.”

The most common type of data submitted to an external generative artificial intelligence model was company source code. In addition, the data showed that users were uploading images, structural data, and “even found research and technical documentation being uploaded to those unauthorized AI systems, which presents a risk of intellectual property exposure.”

The Verizon report reiterates the exponential growth of unauthorized use of gen AI systems, which will continue as users become more comfortable with the technology. This presents a significant data loss risk to organizations of intellectual property, proprietary and confidential information and sensitive personal information. No matter what industry, how big or small an organization is, whether for profit or not-for-profit, now is the time to address this risk and develop an AI Governance Program.

Photo of Linn Foster Freedman Linn Foster Freedman

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chair’s the firm’s Data Privacy and Security Team. Linn focuses her practice on…

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chair’s the firm’s Data Privacy and Security Team. Linn focuses her practice on compliance with all state and federal privacy and security laws and regulations. She counsels a range of public and private clients from industries such as construction, education, health care, insurance, manufacturing, real estate, utilities and critical infrastructure, marine and charitable organizations, on state and federal data privacy and security investigations, as well as emergency data breach response and mitigation. Linn is an Adjunct Professor of the Practice of Cybersecurity at Brown University and an Adjunct Professor of Law at Roger Williams University School of Law.  Prior to joining the firm, Linn served as assistant attorney general and deputy chief of the Civil Division of the Attorney General’s Office for the State of Rhode Island. She earned her J.D. from Loyola University School of Law and her B.A., with honors, in American Studies from Newcomb College of Tulane University. She is admitted to practice law in Massachusetts and Rhode Island. Read her full rc.com bio here.

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  • Posted in:
    Intellectual Property
  • Blog:
    Data Privacy + Cybersecurity Insider
  • Organization:
    Robinson & Cole LLP
  • Article: View Original Source

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