ChatGPT and Data Leakage: Are Your Employees Sharing Secrets with AI?

Is your team inadvertently exposing your company's most sensitive data? A recent study by LayerX Security Ltd. revealed a startling truth: 77% of employees admit to pasting confidential company data into generative AI tools like ChatGPT [1]. For Irish SMEs, this isn't just a hypothetical risk; it's a clear and present danger that could lead to significant financial penalties, reputational damage, and a loss of competitive advantage. As AI tools become ubiquitous, understanding and mitigating the risks of ChatGPT data leakage is paramount to safeguarding your business. This article will guide you through the threats and outline how to create a robust AI acceptable use policy tailored for the Irish business landscape.

The Unseen Threat: How ChatGPT Data Leakage Occurs

ChatGPT and similar AI models are designed to learn from the data they process. While incredibly powerful, this learning mechanism presents a critical vulnerability for businesses. When employees input sensitive information – be it customer lists, financial projections, proprietary code, or strategic plans – that data can inadvertently become part of the AI's training set. This means your confidential information could potentially be surfaced in responses to other users, or worse, become accessible to malicious actors. This unintentional sharing constitutes a significant ChatGPT data leakage risk.

Consider these common scenarios where employees might inadvertently leak data:

• Seeking assistance with code: A developer pastes a snippet of proprietary code into ChatGPT to debug it, unknowingly contributing intellectual property to the AI's knowledge base.
• Drafting internal communications: An HR manager uses ChatGPT to refine a sensitive internal memo containing employee personal data, risking exposure.
• Market research: A sales team member inputs confidential client data or unreleased product details to generate market analysis, potentially compromising competitive advantage.

Each instance, seemingly innocuous, creates a pathway for data leakage. The challenge lies in the ease of use and the perceived helpfulness of these tools, often leading employees to bypass established security protocols without malicious intent. This 'shadow AI' usage is a growing concern for cybersecurity professionals.

Navigating the Irish Regulatory Landscape and ChatGPT Data Leakage

Ireland's Data Protection Commission (DPC) is actively monitoring the use of AI and its implications for data privacy. Recent investigations into AI chatbots highlight the DPC's commitment to enforcing GDPR and other data protection obligations [2]. For Irish SMEs, this means that any ChatGPT data leakage incident involving personal data could trigger a DPC investigation, leading to substantial fines under GDPR, which can be up to €20 million or 4% of global annual turnover, whichever is higher. The DPC's proactive stance underscores the need for Irish businesses to be acutely aware of their data protection responsibilities when engaging with AI.

Furthermore, the upcoming EU AI Act, while primarily focused on high-risk AI systems, will set a precedent for responsible AI use across the Union. Businesses that fail to implement robust controls around AI usage could find themselves in breach of evolving regulatory expectations. The National Cyber Security Centre (NCSC) Ireland has also issued guidance on generative AI, particularly for public sector bodies, recommending restricted access by default [3]. While this guidance is for the public sector, it serves as a strong indicator of best practice for all Irish organisations, emphasizing the need for a well-defined AI acceptable use policy.

Crafting an Effective AI Acceptable Use Policy

The most effective defence against ChatGPT data leakage is a clear, comprehensive, and enforceable AI acceptable use policy. This policy should not be a restrictive barrier but a guiding framework that empowers employees to use AI tools safely and responsibly. Here are key components to include:

1. Clear Guidelines on Confidential Information

Explicitly define what constitutes confidential or sensitive information within your organisation. Prohibit the input of any such data into public generative AI tools. Provide examples to avoid ambiguity and ensure employees understand the boundaries.

2. Approved AI Tools and Platforms

Specify which AI tools, if any, are approved for business use and under what conditions. Consider implementing enterprise-grade AI solutions that offer enhanced security and data privacy features, or sandboxed environments for experimentation. This helps manage the risk of ChatGPT data leakage by controlling the tools employees interact with.

3. Training and Awareness

Regularly educate employees on the risks associated with generative AI, the importance of data privacy, and the specifics of your AI acceptable use policy. Use real-world examples of data leakage to illustrate the potential consequences. Ongoing training is crucial as AI technology evolves.

4. Monitoring and Enforcement

Implement technical controls where possible to monitor the use of generative AI tools and enforce policy compliance. This could include data loss prevention (DLP) solutions or network monitoring. Clearly outline the disciplinary actions for policy breaches to ensure accountability.

5. Data Minimisation and Anonymisation

Encourage employees to practice data minimisation – only inputting the absolute necessary information – and to anonymise or pseudonymise data whenever possible before using AI tools for analysis or content generation. This reduces the impact of any potential ChatGPT data leakage.

---

Free Resource: Download The Irish SME Cyber Survival Guide — 10 controls based on NCSC Ireland & ENISA guidance. Plain English, no jargon.

---

What This Means for Your Business

The risks associated with uncontrolled AI use are not abstract—they have tangible consequences for your business. From regulatory penalties to the loss of client trust, the stakes are high. A proactive approach, grounded in a clear AI acceptable use policy, is essential for navigating this new terrain. The table below summarises the key risks and the corresponding mitigation strategies for Irish SMEs.

Ready to Strengthen Your Security Posture?

Pragmatic Security works with Irish SMEs to build practical, proportionate cybersecurity programmes that protect your business, satisfy regulators, and give you confidence. Whether you need NIS2 compliance support, a vCISO on retainer, or a one-off security assessment, we're here to help.

Book a free 20-minute strategy call today — no jargon, no hard sell, just practical advice from an experienced Irish cybersecurity professional.

Or contact us at [email protected] or call +353 870 515 776.

---

References:

[1] LayerX Security Ltd. (2023). The Hidden Risks of Generative AI in the Workplace. Available at: https://www.layerx.security/resourceshttps://www.layerx.security/resources/blog/generative-ai-workplace-risks

[2] Data Protection Commission. (2023). Guidance on Generative AI. Available at: https://www.dataprotection.ie/en/news-media/blogs/guidance-generative-ai

[3] National Cyber Security Centre. (2023). Guidance on the Use of Generative AI. Available at: https://www.ncsc.gov.ie/pdfs/NCSC_Guidance_on_Generative_AI.pdf

---

Take the Next Step

If AI-related security risks in your business is something you're thinking about, the best starting point is a structured conversation.

Book a free 20-minute call with our vCISO team. We work with Irish SMEs across every sector — no jargon, no scare tactics, just clear advice on what to do next.

Book Your Free 20-Minute Call →