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The Hidden Data Leaks Happening Inside Your AI Tools

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Introduction

Artificial intelligence is transforming the way organizations work. Large language models and generative AI assistants help employees write emails, summarize meetings and make faster decisions. These tools promise to increase productivity, unlock innovation and reduce costs. However, with great power comes great responsibility. The same AI tools that accelerate your work can also expose sensitive data in unexpected ways. When a model has access to corporate documents, email threads and internal chats, a malicious prompt or misconfiguration can coax it into sharing information that was never meant to leave the organization. Because the user may not even know a model has been compromised, the leak can go undetected until it causes serious harm. 

Cybersecurity and data protection leaders must recognize that AI is a new and different attack surface. The rules of traditional security still apply: protect data, limit access, and monitor usage. Yet AI brings new challenges. The logic of an AI assistant is hidden in a complex network of weights and training data. Attackers can trick the model into executing hidden instructions embedded in seemingly harmless content. Even trusted employees can inadvertently paste sensitive data into tools without realizing it will be stored or shared outside of company controls. It is not enough to adopt AI; organizations must secure it. 

The Explosion of Generative AI and Copilot Adoption

Large language model assistants are no longer experimental. Enterprises across industries have rushed to integrate generative AI into their workflows. Microsoft 365 Copilot is one of the most prominent examples. By mid 2024 more than ten thousand businesses had adopted Copilot. The assistant works across Outlook, Word, Excel, PowerPoint and Teams. Employees use it to draft content, generate reports, summarize conversations and search organizational knowledge. Adoption has been swift because Copilot and similar tools embed AI directly into familiar software. Without leaving the application, a worker can ask the AI to write a status update or analyze a spreadsheet. 

Several factors drive this rapid growth. First, generative AI lowers the barrier to automation. Non technical users can ask natural language questions instead of writing code. Second, enterprises face competitive pressure. Leaders believe that companies leveraging AI will be more productive, so they encourage employees to experiment. Third, major technology vendors have built AI into their flagship products, making adoption almost unavoidable. Microsoft includes Copilot licenses in some enterprise subscriptions, meaning many companies already pay for it. Finally, early success stories fuel interest. Organizations report faster content production, improved customer service and more informed decisions when using AI. 

However, adoption is outpacing risk management. Many organizations allowed broad access to AI tools without setting clear policies for usage, classification of data or integration with existing security controls. Employees use consumer chat bots with little oversight. They may input proprietary code or personal data into public models that record interactions. Without guidance, developers experiment with plug in architectures and retrieval augmented generation (RAG) systems that connect models to internal databases. This connectivity increases the risk of accidental exposure. According to the National Institute of Standards and Technology, prompt injection attacks — where adversaries provide malicious instructions that override a model’s intended behavior — have been flagged as a top emerging risk. NIST calls indirect prompt injection “generative AI greatest security flaw”. The Open Web Application Security Project (OWASP) ranks prompt injection as the number one threat to large language model applications. 

AI adoption therefore amplifies the need for security leaders to understand how these tools work and how they can be abused. While organizations want to empower their workforce, they must also protect data and comply with regulations. Achieving both requires a proactive approach. 

Why AI Tools Pose Hidden Data Leak Risks

When employees interact with AI assistants, they often assume the tool is as safe as any corporate software. After all, the assistant appears inside trusted applications. Yet AI tools introduce new paths for data to escape. Understanding these mechanisms is essential to prevent breaches. 

Prompt Injection and Misuse of Context

AI models produce responses based on input prompts and, in enterprise contexts, additional context retrieved from internal sources. Attackers have realized that if they can influence the prompt or the content the model reads, they can manipulate its behavior. A prompt injection attack embeds malicious instructions into a document or message. When the model reads the content, it executes the hidden commands. This can cause the model to ignore guardrails, leak sensitive information or perform actions outside its intended scope. Because the model follows the instructions in its context, the user may not realize anything is wrong until the response contains unauthorized data. 

AI Agents with External Access

Modern AI tools often act as agents, meaning they can call external APIs, query databases or send emails to accomplish tasks. This connectivity increases utility but expands the attack surface. If an attacker tricks the model into using its privileges, they can access data or trigger actions. For example, if a chatbot has permission to query a customer relationship management system, an injection could request all customer records. The model might output the data or send it to an attacker controlled endpoint. Without proper restrictions and monitoring, such misuse may not be detected. 

Lack of Input and Output Filtering

Traditional software development includes input validation to prevent injection attacks. AI systems require similar protections but the complexity is higher. Models can interpret instructions embedded in images, code blocks or markup languages. If an organization does not filter these inputs or sanitize outputs, hidden instructions may slip through. In the EchoLeak case, the attack used reference style Markdown links that bypassed link redaction. Because the model summarization function automatically included the link, the data exfiltration occurred without user interaction. 

Shadow AI and Unapproved Tools

In some organizations, employees use consumer AI tools for convenience. They paste sensitive data into public chat bots or use open source models on personal devices. These unsanctioned tools may store and reuse the data, creating a new path for leaks. Moreover, employees may not realize that their actions could violate regulatory or contractual obligations. Without a clear policy and training, shadow AI becomes a blind spot. 

Insufficient Monitoring and Governance

AI interactions often remain invisible to standard security monitoring. Logs may not capture the content of prompts and responses, or the system may not label data as sensitive. If a prompt injection occurs, there is little way to detect it. Many organizations also lack formal governance structures to determine who owns AI tools, who approves use cases and how to respond to incidents. Without defined processes, the organization is slow to react to emerging threats. 

These risk factors underscore the need for new security practices tailored to AI. Because the models are dynamic and can be influenced by attackers, they must be treated like active code. The following case study illustrates how quickly a vulnerability can be weaponized. 

Case Study: The EchoLeak Zero Click Exploit

In June 2025, researchers at Aim Security disclosed EchoLeak, the first known zero click prompt injection vulnerability to cause real data exfiltration in a production AI system. EchoLeak targeted Microsoft 365 Copilot and exploited the way it processed Outlook emails. The attack required no user interaction. By sending a specially crafted email, the attacker could trick Copilot into accessing internal files and sending them to an external server. Microsoft assigned the vulnerability the identifier CVE 2025 32711 and issued emergency patches to fix it. Understanding how the exploit worked provides valuable lessons. 

How the Attack Worked

  1. Malicious Email Delivery: The attacker sent an email containing hidden instructions written in a reference style Markdown link. This format disguised the instructions because the link looked like a citation rather than a command. 
  2. Evading Detection: Copilot uses a classifier called XPIA to detect prompt injections. The EchoLeak payload bypassed this classifier. The reference style Markdown was not flagged as an injection and the link redaction mechanism did not remove it. The malicious email also exploited auto fetched images. Copilot automatically downloaded images embedded in responses to provide previews. The attacker leveraged this behavior to fetch data from the victim’s environment. 
  3. Abusing the Teams Proxy: To avoid content security policies that block unknown domains, the exploit used a Microsoft Teams asynchronous preview API. This API is on an allowlist for Copilot. When Copilot responded to the malicious email, it embedded a link that pointed to a Microsoft Teams URL. This URL acted as a proxy, forwarding the request to the attacker’s server. Because the request originated from a trusted domain, Copilot’s security policies did not block it. 
  4. Privilege Escalation and Exfiltration: When Copilot summarized the email, it accessed relevant documents stored in the user’s context. The hidden instructions caused Copilot to include sensitive information in the link. The Teams proxy fetched the link, sending the data to the attacker without any clicks by the user. The entire chain occurred without user involvement, making the attack stealthy. 

        Key Lessons from EchoLeak

        • AI Is a New Threat Surface: EchoLeak demonstrated that the model’s ability to combine data from emails, documents and chat into one response can be exploited. Even though the user did nothing wrong, the model betrayed its trust boundary. This shows that AI integration points must be secured just like any other code path. 
        • Prompt Injection Is a Real Threat: Before EchoLeak, prompt injection attacks were theoretical. This vulnerability provided concrete evidence that attackers can weaponize hidden instructions to cause data leakage. It also shows that detection mechanisms must evolve to catch novel patterns. 
        • Zero Click Exploits Are Possible: Many security teams assumed that AI responses required user input. EchoLeak proved that an attacker can send a single email and trigger a chain reaction inside Copilot. This means security controls cannot rely on the user to detect suspicious behavior. 
        • Coordinated Disclosure Matters: The vulnerability was discovered privately in January 2025 and reported to Microsoft. The company issued a server side fix in May 2025 before public disclosure in June. Because of coordinated disclosure, there was no evidence of in the wild exploitation. This shows the importance of responsible research and vendor cooperation. 

        EchoLeak is a wake up call. It shows that AI systems can be exploited in ways that bypass both traditional security controls and new AI specific defenses. Security leaders must assume that these kinds of vulnerabilities will continue to emerge. The broader risk landscape includes more than just prompt injection. Understanding other attack vectors is essential to prepare for what is coming. 

        Beyond EchoLeak: Other AI Security Risks

        The EchoLeak incident is not isolated. Researchers and attackers are exploring many ways to abuse AI systems. Below are several categories of risks that organizations should consider. 

        Data Poisoning and Model Integrity

        AI models learn from training data. If an attacker can insert malicious data into the training set, they can influence the model’s behavior. For example, a competitor might feed negative reviews about your products into a sentiment analysis model. When your model trains on the poisoned data, it may produce biased results. Data poisoning can also insert backdoors into the model. During inference, a specific trigger could cause the model to output sensitive information. Because training data often comes from multiple sources, verifying its integrity is challenging. 

        Model Inversion and Membership Inference

        Attackers may attempt to reconstruct sensitive training data by querying the model. If the model is exposed via an API, repeated queries could reveal information about individuals in the training set. Membership inference attacks determine whether a specific data record was included in training. These attacks can violate privacy regulations and disclose personal or proprietary data. 

        Supply Chain Vulnerabilities

        Many AI applications rely on third party components: open source models, plug ins and APIs. A vulnerability in any component can compromise the entire system. For example, a plug in that fetches data from external sources might not handle input validation properly, allowing cross site scripting or injection attacks. Organizations need to perform due diligence on third party AI tools and manage dependencies. 

        Excessive Data Collection and Overexposure

        Models like Copilot may have broad access to corporate documents, emails and chat histories. Without proper scoping, they can access more data than necessary. If a vulnerability exposes the context, a large amount of sensitive data is at risk. Security teams should enforce the principle of least privilege for AI models, ensuring they only retrieve what they need for a specific task. 

        Shadow AI and Uncontrolled Experiments

        As mentioned earlier, employees sometimes use unapproved AI tools. They may also build their own prototypes using open source models or call external APIs without security review. These shadow projects can become gateways for attackers. Without centralized oversight, it is hard to track what data these tools process and where it goes. Creating a catalog of AI tools and requiring security sign off for new projects helps mitigate this risk. 

        Privacy and Compliance Issues

        AI applications must comply with privacy regulations such as GDPR or HIPAA. If a model processes personal data, the organization needs consent, transparency and the ability to erase data on request. Generative AI complicates this because it can memorize or regenerate sensitive content. Legal teams need to work closely with technology and security teams to define acceptable use and retention policies for AI interactions. 

        Organizations that understand these risks can take steps to mitigate them. The next section outlines a practical approach to building an AI security program. 

        Building a Proactive AI Security Program

        Securing AI is not a one time project; it requires ongoing governance, technical controls and cultural change. Below are actionable steps that CISOs and security leaders can take to build a proactive AI security program. 

        1. Inventory and Classify AI Applications

        Start by cataloging all AI applications and services in use. This includes enterprise tools like Copilot, customer facing chatbots, AI embedded in products and experimental prototypes. For each application, document the data sources it uses, the actions it can perform and the type of outputs it generates. Classify the sensitivity of the data involved. This inventory helps you understand your AI footprint and identify high risk areas. 

        2. Establish Governance and Policies

        Define a governance framework that outlines who is responsible for approving AI initiatives, evaluating risk and monitoring compliance. Create policies for acceptable use of AI tools. For example, specify what types of data employees can input into AI assistants and which tools are approved. Require security reviews for any new AI integration. Ensure legal and compliance teams are part of the governance process. Regularly update policies as technology and regulations evolve.

        3. Implement Technical Controls

        • Access Control: Apply the principle of least privilege to AI systems. Limit the data the model can access to only what is necessary for a given task. For example, restrict a Copilot instance to files relevant to a user’s role, rather than the entire document library. 
        • Input Validation and Output Filtering: Use filters to detect and remove malicious content before it reaches the model. Examine inputs for known injection patterns and sanitize outputs to prevent data exfiltration. This can include removing reference style links or encoding user provided content. 
        • Segmentation and Sandboxing: Isolate AI workloads from critical systems. Run models in segmented environments so that a compromise does not spread. If the model can call external APIs, restrict which domains it can access. Implement egress filters to prevent unauthorized data transmission. 
        • Logging and Monitoring: Collect detailed logs of AI interactions, including prompts, context data retrieved and output. Use anomaly detection to flag unusual patterns such as large data requests or repeated access to sensitive files. Monitor for evidence of prompt injection or data exfiltration. 
        • Adversarial Testing: Conduct regular penetration testing and red teaming focused on AI. Simulate prompt injection, data poisoning and model inversion attacks. Use findings to improve defenses. Encourage responsible disclosure by researchers. 

        4. Train Employees and Foster Awareness

        People play a crucial role in AI security. Provide training on the risks of sharing sensitive data with AI tools. Teach employees how to recognize suspicious prompts or outputs and how to report incidents. Encourage a culture of caution when experimenting with new AI services. Make it clear that unsanctioned tools are not allowed.

        5. Engage with Vendors and Stay Informed

        Work closely with AI vendors such as Microsoft to understand their security measures and update schedules. Subscribe to security advisories and patch regularly. Participate in industry forums to share best practices and stay informed about emerging threats. When vendors release new features, evaluate their security implications before enabling them. 

        6. Build an Incident Response Plan for AI Breaches

        Prepare for the possibility of an AI related incident. Develop procedures for detecting, containing and responding to prompt injection, data exfiltration or model misuse. Identify the stakeholders who must be involved, including IT, legal, communications and executive leadership. Practice tabletop exercises to test the response plan. Ensure that you can quickly revoke access for compromised models, isolate affected systems and notify users. 

        7. Integrate AI Security into Enterprise Risk Management

        Treat AI security as part of your overall cyber risk management program. Include AI risks in risk registers, report them to the board and incorporate them into business continuity plans. Align AI security controls with existing frameworks such as NIST or ISO. This integration helps ensure that AI does not remain a silo but becomes a standard part of security conversations. 

        Building a comprehensive AI security program takes time. Partnering with experts who understand both AI technology and cybersecurity can accelerate progress. Netrix Global offers such expertise. 

        Netrix Global Approach to AI Security and Governance

        Netrix Global is an engineering led IT consulting and managed services provider with decades of experience across cybersecurity, digital workplace, cloud infrastructure and data intelligence. We act as an extension of our clients’ teams, providing end to end services from strategy to implementation. Our deep bench of security experts operates twenty four hours a day, seven days a week, delivering managed detection and response, vulnerability management and incident response. Through our long term partnership with Microsoft, we participate in the Microsoft Intelligent Security Association (MISA) and deliver specialized workshops and managed services. 

        AI Advisory and Readiness

        Netrix Global helps organizations assess their readiness for AI through a structured three phase approach: Assess, Art of the Possible and Build the Plan. In the Assess phase, we evaluate the current environment, including data quality, architecture, governance and security. We identify gaps that could hinder AI adoption or introduce risk. In the Art of the Possible phase, we work with stakeholders to envision AI use cases, prioritizing those that deliver value while aligning with business objectives. In the Build the Plan phase, we create a roadmap that details the actions required to achieve AI readiness. This includes defining use cases, establishing governance, designing data pipelines and identifying required security controls.

        Data Foundations for AI

        Our data intelligence practice focuses on building unified, governed and scalable data platforms. We design lake house architectures that combine the flexibility of data lakes with the structure of data warehouses. These platforms support analytics, AI and machine learning at scale. We implement metadata catalogs, lineage tracking and data quality rules. Data is the fuel for AI; by ensuring it is organized and secure, we reduce the risk of leaks and enable trustworthy insights.

        Generative AI Security and Governance

        Netrix Global offers specialized services for securing generative AI. We conduct threat modeling to identify how AI tools might be attacked, including prompt injection, model poisoning, supply chain vulnerabilities and context overexposure. We design technical controls such as input validation, output filtering, identity management and access controls. We also assist with policy development. Our consultants help clients draft acceptable use policies, define approved tools and create processes for risk assessment. As part of our membership in MISA, we leverage the latest Microsoft security innovations to protect tools like Copilot. We collaborate with Microsoft to understand new features, test their security and implement best practices for deployment. 

        AI Agent Solutions and Integration

        Our engineers build custom AI agents that solve real business problems. Whether it is a chatbot that answers policy questions, an agent that summarizes financial reports or a tool that automates IT support, we design solutions that integrate securely with existing systems. We ensure that each agent follows the principle of least privilege, retrieving only the data necessary for its task. We implement logging, monitoring and throttling to detect misuse. We also design fallback mechanisms to ensure that human approval is required for sensitive actions.

        Adoption and Change Enablement

        Introducing AI into an organization requires cultural change. Our adoption and change enablement practice helps clients manage this transition. We provide training tailored to different roles, including executives, developers and end users. We address concerns about job impact and emphasize the value of AI as an augmentation, not a replacement. We also teach employees how to interact safely with AI tools, how to recognize prompt injection attempts and how to report suspicious behavior. By empowering users, we reduce the chance of shadow AI and misuse.

        Managed Security Services

        Netrix Global offers ongoing protection through managed security services. Our security operations center monitors client environments around the clock, detecting threats and responding to incidents. We integrate logs from AI systems into our monitoring tools, providing visibility into prompts, responses and data flows. When an anomaly occurs, we investigate and take corrective action. We also provide vulnerability management services to identify and remediate weaknesses in AI applications and related infrastructure. Our experts continuously tune detection logic to keep pace with evolving threats.

        Partnering for Success

        The landscape of AI and security is rapidly changing. New models, tools and vulnerabilities emerge regularly. Organizations cannot manage this alone. Netrix Global partners with clients to provide expertise, resources and accountability. We stay current on research, participate in industry consortia and maintain close relationships with vendors. Our clients benefit from a comprehensive approach that combines strategic guidance, technical execution, cultural change and ongoing monitoring. By partnering with Netrix Global, organizations gain a trusted advisor who understands both the promise of AI and the complexities of securing it.

        Conclusion and Call to Action

        Artificial intelligence presents a transformative opportunity for businesses. It boosts productivity, enhances decision making and fuels innovation. Yet the same tools can expose sensitive data if not properly secured. The EchoLeak zero click exploit proved that AI systems can be manipulated to leak confidential information through hidden instructions. The rapid adoption of tools like Copilot and the ranking of prompt injection as the top risk for large language models demonstrate that the threat is real and immediate. CISOs and IT security leaders must move beyond curiosity to action. 

        Start by understanding your AI inventory and educating your teams about risks. Develop governance structures that align AI with business goals while enforcing security and compliance. Implement technical controls that limit the model’s access, validate inputs and monitor outputs. Test your systems against adversarial scenarios and prepare response plans for AI incidents. Partner with experts like Netrix Global who offer deep experience across cybersecurity, data intelligence and AI governance. We act as an extension of your team, providing twenty four hour security coverage and leveraging a decades long partnership with Microsoft to bring the latest solutions. 

        The journey to secure AI is ongoing. By taking proactive steps now, you can harness the benefits of AI while protecting your organization’s most valuable assets. Netrix Global is ready to guide you. Contact us to schedule an AI security readiness assessment and learn how we can help you build an AI program that is both innovative and safe. 

        Frequently Asked Questions (FAQs)

        Hidden data leaks occur when AI systems expose sensitive information without the user realizing it. This can happen through prompt injection, where malicious instructions cause the model to reveal data, or through misconfigured context retrieval that allows the model to access more information than necessary. The leaks are “hidden” because the user might see a harmless response while the underlying system sends data to an attacker or saves it in an unsecured location. EchoLeak is an example of a hidden leak triggered by a malicious email. 

        EchoLeak exploited several features in Microsoft Copilot to achieve zero click data exfiltration. The attacker sent an email with hidden instructions embedded in a reference style link. Copilot’s prompt injection classifier did not detect the malicious instructions. When Copilot summarized the email, it included a link that pointed to a Microsoft Teams domain, which then forwarded the request to the attacker’s server. Because the request came from a trusted domain, security controls did not block it. The user did not need to click anything; the data was exfiltrated automatically. 

        AI vendors are developing safeguards such as classifiers to detect malicious inputs and output filters to sanitize responses. In Copilot, the XPIA classifier is designed to detect injection attempts. However, EchoLeak demonstrated that attackers can craft payloads that bypass such classifiers. AI security is evolving, and defenses may lag behind new attack techniques. Organizations should not rely solely on vendor protections. They need to implement additional controls like input validation, context partitioning and network filtering. 

        Start by conducting a risk assessment and inventory of all AI tools in use. Implement policies that specify what data can be shared with AI and which tools are authorized. Apply least privilege access to limit the data each model can view. Use filters to detect and remove malicious content. Monitor AI interactions and log prompts and outputs for anomaly detection. Train employees to use AI safely and report suspicious behavior. Partner with experts like Netrix Global to design and implement these controls. 

        Netrix Global combines decades of experience across cybersecurity, cloud, and data intelligence. We act as an extension of your team and operate a twenty four hour security operations center. We are a strategic partner of Microsoft and part of the Microsoft Intelligent Security Association, giving us early insight into emerging threats and defenses. Our services include AI readiness assessments, data platform design, AI security and governance, custom agent development, and managed security operations. With Netrix Global, you gain a trusted advisor to help you build a secure and resilient AI program. 

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