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Beware of Free AI Tools: What SMBs Need to Know About Data Risk

Written by Rich Kask | Nov 27, 2025 10:45:52 PM

Free AI tools like the basic versions of Copilot, DeepMind, and others can seem like a convenient way to boost productivity. Many teams use them to draft emails, summarize documents, or brainstorm ideas. However, these tools often come with serious risks that most businesses are not aware of, particularly when it comes to data handling and long-term security. 

According to a 2023 study, 43 percent of professionals are using AI tools such as ChatGPT, and 68 percent are doing so without their employer’s knowledge. This “shadow AI” trend increases the chance of sensitive information being shared outside your organization. 

 

You May Be Giving Away Your Data Without Realizing It 

When you use a free AI tool, you often have to agree to broad terms of service. These terms can allow the provider to collect, store, or reuse your data in ways that may not align with your business policies. In some cases, they may even use inputs to train their models. 

This becomes a significant issue if staff unknowingly paste internal documents, customer information, or confidential plans into these platforms. Once it is uploaded, you no longer have control over how or where that data exists. 

➡️ Cybersecurity Services  

Simple rule: If you do not want the information posted publicly, you should not place it in a free AI tool. 

 

Who Owns the Data You Upload? 

With many free AI tools, the answer is not you. Ownership often becomes shared or transferred the moment you submit content for processing. This can have long-term consequences if sensitive business practices, financial details, or client information are involved. 

Paid, enterprise-grade AI solutions such as Microsoft Copilot for 365 offer significantly stronger protections. They are designed to keep your data contained within your own Microsoft tenant and governed by your existing security policies. 
 
➡️ Microsoft 365 Consulting  

Cybersecurity Implications You Should Not Ignore 

Uploading internal information to unsecured AI tools creates multiple cybersecurity risks: 
• Increased exposure of confidential data 
• Potential for accidental data leaks 
• Higher likelihood of cybercriminals gaining access through compromised third-party platforms 
• Compliance challenges for industries with strict regulations 

These risks grow even faster when employees are using AI without leadership or IT approval. 

This is where a proper cybersecurity foundation matters. A managed provider can help you implement policies that reduce shadow AI activity, enforce safe-use guidelines, and protect data from unauthorized sharing. 

Internal link suggestion: Link to your “Cybersecurity Services” or “Managed Security” page. 

 

How We Help SMBs Stay Secure 

If you want to ensure your data remains protected, our team here at Nucleus Networks offers governance, cybersecurity, and Microsoft 365 guidance that helps you adopt AI safely. We can build usage policies, train staff, and put the right controls in place to reduce risk while improving productivity. 

Reach out if you want support building a safer, more secure AI framework for your business.