Microsoft has identified a growing trend of unauthorized artificial intelligence tool usage in professional settings, a practice it terms "Shadow AI." A recent company report reveals that a significant majority of employers in the United Kingdom are observing this behavior, which introduces potential security vulnerabilities and data risks for businesses. Despite the warning, investor reaction was minimal.
Key Takeaways
- Microsoft reports that 71% of UK employers have noticed unapproved AI tools being used by staff.
- The practice, dubbed "Shadow AI," is driven by employee efforts to increase productivity.
- Separately, Microsoft has reaffirmed its commitment to developing future Xbox consoles.
- Oracle expressed confidence in OpenAI's ability to manage its substantial cloud computing costs, following a major partnership deal.
The Rise of Unauthorized AI in Business
Microsoft's research highlights a significant challenge for modern businesses: the widespread use of unauthorized consumer AI tools by employees. The company's findings indicate that this is not an isolated issue, with 71% of employers in the United Kingdom reporting some level of unapproved AI use. The frequency is also notable, as 51% of these employers stated they observe such usage on a weekly basis.
Employees are turning to these tools to manage their workloads and meet productivity demands. The data shows that approximately half of the surveyed employees use AI for writing workplace communications. Around 40% utilize these tools for creating reports and presentations, tasks that are central to many corporate roles.
AI Usage by Task
According to Microsoft's report, employees are using unauthorized AI for a range of professional activities:
- Workplace Communications: ~50%
- Reports and Presentations: ~40%
- Finance-Related Tasks: 22%
Balancing Productivity and Security
The appeal of AI tools is clear. Globally, it is estimated that AI assistants are contributing to savings equivalent to 12 billion hours of work. For employees facing pressure to deliver results quickly, leveraging AI can seem like a logical and efficient solution.
However, Microsoft cautions that the unofficial nature of "Shadow AI" creates significant risks. When employees use unapproved platforms, they may inadvertently expose sensitive company data to security breaches. These consumer-grade tools often lack the robust security protocols of enterprise software, creating potential vulnerabilities that companies cannot monitor or control.
The core issue is that employees may not be aware of these security implications or may prioritize meeting deadlines over corporate policy. This creates a difficult situation for companies trying to balance the productivity gains from AI with the need to protect their information assets.
Microsoft Reaffirms Commitment to Xbox Consoles
In a separate development, Microsoft addressed speculation about the future of its Xbox gaming division. The emergence of powerful handheld gaming devices, such as the ROG Ally, has led some to question the long-term viability of traditional living room consoles.
Microsoft moved to reassure its customer base with a formal statement confirming its dedication to console hardware. The company emphasized its ongoing investment in the next generation of gaming devices.
"We are actively investing in our future first-party consoles and devices designed, engineered and built by Xbox. For more details, the community can revisit our agreement announcement with AMD."
This statement suggests that while handheld gaming is a growing market, it will not replace the company's focus on powerful home consoles. The reference to its partnership with chipmaker AMD further signals that development for future hardware is well underway. Despite these assurances, some in the gaming community remain concerned about what they perceive as a lack of transparency, and are awaiting a full hardware reveal, which is typically expected within the next one to two years based on past console cycles.
Oracle's High-Stakes Partnership with OpenAI
While Microsoft navigates internal AI usage and gaming strategy, one of its major competitors, Oracle, is making headlines with its partnership with OpenAI. At Oracle's AI World conference, co-CEO Clay Magouyrk expressed strong confidence in OpenAI's financial capacity to handle its enormous cloud computing expenses.
Magouyrk told CNBC that OpenAI can "of course" afford a bill that could reach $60 billion for a single year of cloud services. This confidence is backed by a massive deal signed in July, where the two companies entered a five-year partnership valued at over $300 billion. This deal underscores the immense computational resources required to train and operate advanced AI models.
The Cost of AI Leadership
OpenAI's rapid growth comes at a high price. The company reported a $5 billion loss in 2024, a figure that reflects the massive investment needed for computing infrastructure. Despite this, its flagship product, ChatGPT, has achieved remarkable user adoption, now boasting 800 million weekly active users less than three years after its launch.
Building the Future of AI Infrastructure
To power its models, OpenAI relies on a multi-cloud strategy. It rents high-demand Nvidia chips through Oracle's cloud infrastructure, while also collaborating with Google, Microsoft, and the specialized cloud provider CoreWeave.
Looking ahead, OpenAI is also taking steps to control its own hardware supply chain. The company is partnering with Broadcom to manufacture its own custom AI chips. The goal of this collaboration is to deploy an ambitious 10 gigawatts of chip capacity, a massive infrastructure project that will require significant energy resources. Oracle co-CEO Mike Sicilia acknowledged the energy challenge but stated that securing enough power is a matter of time.
Oracle is already integrating OpenAI's technology into its own product lines. Sicilia noted that Oracle is using OpenAI models in its healthcare software, particularly within patient portals connected to Cerner, a company Oracle acquired for $28 billion in 2022. This integration demonstrates a key part of Oracle's strategy: leveraging its partnership with a leading AI firm to enhance its enterprise software offerings.