Wire · regulatory
How shadow AI and hidden subprocessors are challenging governance and compliance efforts
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Fusion42 · 22 July 2026 · Fusion42 review
63.6% of AI vendors fail to disclose subprocessor activity in data protection assessments, creating hidden compliance gaps under EU AI Act, CCPA and emerging regulations. Companies risk unknowingly breaching disclosure requirements whilst relying on incomplete vendor due-diligence.
This Wire brief sits within Fusion42's coverage of AI Infrastructure and Cybersecurity.
◆ ◆ The Wire takeaway
Your vendor's data protection agreement is incomplete - they're not telling you about the AI subprocessors they actually use, and you're liable for that gap under the EU AI Act. Audit your entire vendor stack this quarter or you're in breach.
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1 source · 22 Jul 2026
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