The phenomenon is known as shadow AI, and according to the ¶¶Òõ³ÉÄê Future of Professionals Report 2026, it’s currently occurring among more than one-third (36%) of professionals working in corporate tax, legal, and compliance functions who admit they are actively using AI tools their organization have not sanctioned. For businesses at the center of this issue, the risk of information leakage, inaccuracies, cut corners, and a collapse of standardized processes could create dangerous ripple effects.

Pressure to Move Faster

On the surface, the findings should not come as a huge surprise. AI is everywhere these days, and it’s already become second nature for many of us to turn to widely available consumer chatbots for guidance on everything from dinner recipes to exercise tips. On top of that, many corporate professionals are facing increased pressure from internal stakeholders and clients to deliver faster, better-informed decisions with better efficiency and cost controls. According to our research, 58% of corporate tax and legal professionals say they’re facing “some” or “significant” pressure from their key stakeholders to move faster on AI adoption.

The disconnect occurs when tools designed for consumer-grade tasks are applied to professional-grade work, which often contains proprietary or sensitive information that should not be shared on external servers, or highly specialized data that consumer large language models (LLMs) were never meant to process. Still, despite the obvious risks associated with using unsanctioned AI tools for high-stakes professional work, many companies are just not moving fast enough on AI adoption and, as a result, employees are taking matters into their own hands.

Understanding the Risks

For many, it’s a survival instinct. In fact, 15% of professionals in corporate enabling functions say they are already seeing financial consequences of insufficient progress on AI adoption by their companies, and another 29% say they expect them within 12 months. Pressed to continually find ways to do more with less, inundated with news about new AI tools that can do seemingly anything, and drawn-in by the allure of freely available and amazingly powerful consumer tools, it’s no surprise that many corporate tax, legal and compliance professionals would start experimenting.

The downsides of that trend are already starting to become , and can include everything from lapses in corporate governance to over-reliance on incorrect or incomplete information – not to mention a lack of standardization whereby each individual employee starts using their own tool.

A New Focus on Collaboration

To address these issues, corporate enabling functions must start to make a clear case to business leadership for why they need professional-grade AI solutions. The fact is that as the AI ecosystem matures, solutions developed for professional grade tasks like corporate tax, law, compliance, and others are becoming highly specialized. These are not the mainstream, consumer-grade chatbots; they are finely tuned pieces of professional software developed for highly specific use cases. Senior leadership may have big-picture AI mandate, but they may not necessarily understand the need for specialized tools. Only the teams in the trenches can deliver that perspective, and these teams need to get a seat at the table where they can advocate for themselves.

It’s also high time for most corporate tax, legal and compliance professionals to start taking an honest look at what kinds of tools their teams are currently using – both sanctioned and unsanctioned – to determine where are AI tools already being used, where are people improvising, and where is there unmet demand.

Functions working in isolation on AI strategy are creating shared risk: inconsistent accountability, incompatible governance, and shadow AI that nobody owns. Fiduciary functions like legal, tax, and compliance hold the professional standards that should anchor the enterprise’s AI governance. While, currently, the C-suite, technology and operations teams hold disproportionate sway over AI budgets and implementation, a broader conversation is needed. The general counsel, Chief Compliance Officer and corporate tax leaders are particularly well positioned to lead this conversation – with an emphasis on what’s at stake if companies get it wrong. The time to start having that conversation is now.

About the author
Liz Zimick is President, Corporates, at ¶¶Òõ³ÉÄê

Managing that chain reaction requires shared data across functions and AI with true manufacturing domain expertise. Most companies have neither. As a result, compliance gaps damage customer experience for 54% of manufacturers, according to Forrester, directly impacting revenue and loyalty.

Two Problems, One Crisis

Manufacturers face two compounding challenges.

The first problem is structural. Many rely on multiple compliance vendors across tax, trade, legal, and risk functions, each operating in silos. IT manages ERP systems, operations oversees supply chain, finance owns tax compliance, and legal reviews contracts independently. The result is blind spots where no one sees how changes in one area cascade into others. Forty percent of manufacturers say this fragmentation slows decision-making and innovation, while 54% report it increases financial exposure.

The second problem is technological. While many manufacturers are turning to AI, most tools are too generic to be effective. A general-purpose LLM can summarize a regulation, but it can’t assess how a new forced labor rule in one jurisdiction affects your supplier contracts, duty exposure, and your transfer pricing position at the same time. That kind of reasoning requires AI that is trained on, and embedded within, manufacturing compliance. Generic tools can flag issues; they can’t resolve them with the precision the industry demands.

These two problems reinforce each other. Fragmented systems leave AI tools without full context, while generic AI means applies intelligence that isn’t precise enough – even when the data is shared. Together, they create the compliance burden weighing down the industry.

Embedded, Expert Intelligence Built for Manufacturing

Manufacturers successfully navigating this complexity share a common trait: they’ve moved beyond generic AI and fragmented point solutions to intelligence that is both connected across functions and built around their industry’s specific regulatory reality.

This is where ONESOURCE+, powered by CoCounsel, is fundamentally different, and the distinction is easiest to see in a concrete scenario, like, for example, when a new tariff is announced. With generic AI and disconnected systems, the impact unfolds sequentially – trade flags the change, tax recalculates pricing, and procurement adjusts weeks later, after margins are already at risk. That same tariff change triggers a need for updates across trade classification, indirect tax, and transfer pricing workflows. Our AI is trained specifically on manufacturing compliance rather than general knowledge, allowing your experts to make identification of changes fast, and craft actionable remedies based on defensible decisions.

That domain depth matters and products within ONESOURCE+ deliver. ONESOURCE Global Classification AI and Global Trade Management don’t just centralize workflows, they apply classification and FTA intelligence that generic tools can’t replicate. CLEAR delivers purpose-built supplier risk screening for sanctions and forced labor screening across multi-tier supply chains, cutting false positives without cutting accuracy. For legal teams, CoCounsel Legal puts manufacturing-specific regulatory intelligence directly into contract workflows, enabling real-time action instead of manual handoffs.

The results reflect what connected, vertical expertise makes possible: 50% reduction in product classification time, 2.5x faster free trade agreement processing, and 92% fewer false positives in supplier risk screening.

Compliance as a Competitive Weapon

Leading manufacturers are recognizing that compliance isn’t just a cost center, it’s a competitive advantage when powered by the right intelligence. When industry-specific AI connects a tariff change to its downstream impact on tax calculations, supplier contracts, and procurement, and when the systems that share that intelligence talk to each other, compliance data shifts from burden to growth driver.

With connected intelligence, trade insights inform procurement in real time, customs valuations align with transfer pricing, and legal teams move faster using current, manufacturing‑specific regulatory insights. The result: smarter decisions, faster execution, and advantages competitors can’t easily replicate.

As regulatory complexity accelerates, driven by forced labor regulations, evolving trade agreements, and ESG requirements, manufacturers can no longer rely on fragmented or generic tools. The companies that will succeed will replace disconnected point solutions with expert intelligence embedded in operations, trained on the depth manufacturing requires, and capable of connecting regulatory change to real business impact.

The question facing every manufacturing executive is simple: Are your compliance tools connected enough, and smart enough, for your business?