When Copilot Becomes a Liability: The Hidden Risks of AI with Active Directory and Entra ID

Generative AI tools like Microsoft Copilot are transforming productivity but they’re also exposing massive security blind spots. Copilot sees what your users can access, not what they should.

When your identity environment is built on outdated group policies, unmonitored access, and hybrid sprawl, the result is a big problem.

The AI + Identity Risk

Copilot follows whatever access rules are defined in your environment. For most organizations, that is done in Active Directory and Entra ID. But when those rules are misconfigured, the results can be dangerous:

• A finance intern accidentally sees the CFO’s bonus plan.

• Copilot summarizes legal documents meant for the board.

• Sensitive data is pulled from forgotten SharePoint folders.

• Rogue employees easily gather sensitive or confidential data.

The Legacy of Overexposure

Improper access permission posture management and the resulting misconfigurations have “always” occurred. Exploit data and industry reports all show that misconfigurations are the #1 threat to organizations today:

• Active Directory accounts for 80% of all security exposures identified across organizations, primarily due to identity and credential misconfigurations.

• The Microsoft Digital Defense Report 2023 notes that 43% of customers suffer from insecure Active Directory configurations.

• According to an EMA survey, in just the past two years, 50% of organizations have experienced an AD-specific attack.

• Microsoft reports over 600 million attacks on Entra ID every day.

The most often cited statistic is the most shocking: 62% of organizations have over-permissioned users demonstrating that most companies don’t even know who can access which data.

And according to Palo Alto Networks’ Unit 42, 99% of cloud users, roles, services, and resources grant excessive permissions. Additionally, a study by Radiant Logic reveals that 60% of organizations report having over 21 disparate identities per user, indicating significant identity sprawl and potential over-permissioning.

Copilot doesn’t make access decisions. It just acts on what’s already exposed. Copilot leverages exactly those hidden pathways. The simple fact is that AD and Entra ID weren’t built for the AI era where, over time, they accumulate misconfigurations. The factors are numerous and include the following typical challenges:

• Stale or excessive group memberships

• Indirect permissions via nested groups

• No centralized way to view or reverse changes

• Hybrid sprawl between on-prem and cloud

Now imagine an AI with full visibility into that mess. For security practitioners, it’s a nightmare!

Misconfigurations in AD and Entra ID can lead to unauthorized access to sensitive data beyond their role requirements, attacks that exploit misconfigurations to gain elevated privileges within the network, and data breaches from over-permissioned users.

How to Fix It

To control Copilot exposure, you need identity security posture hygiene:

• Audit all entitlements and permissions in AD + Entra

• Track all changes to users, groups, and objects in real time

• Alert on excessive access or risky changes as they occur

• Revert misconfigurations rapidly

• View entitlement associations including determining desired vs actual access rights for each user, each group, and each object.

Common misconfigurations include such activities as assigning non-administrative accounts as owners of privileged Entra ID applications and granting Entra ID applications with unconstrained Mail.ReadWrite and Mail.Send permissions. To start, verify that administrative permissions are assigned only to the right users (which may be a subset of administrators).

To address these risks, you need the following:

• Regular Audits: Conduct periodic reviews of AD and Entra ID configurations to identify and rectify misconfigurations.

• Implement Least Privilege Access: Ensure users have only the access necessary for their roles.

• Monitor for Anomalies: Utilize monitoring tools to detect unusual activities that may indicate exploitation of misconfigurations.

• Educate Administrators: Provide training to IT staff on best practices for configuring and managing AD and Entra ID environments.

By proactively managing and auditing your Active Directory and Entra ID configurations, you can significantly reduce the risk of security exposures and ensure a more secure identity infrastructure.

The Cygna Labs Advantage

Unfortunately, tools like Microsoft Defender lacks key functionality to resolve these gaps such as providing change alerts, rollback, granular AD auditing, and entitlement visibility.

The good news is that Cygna Labs Security & Compliance Platform is built to rectify the gaps inherent to Active Directory, Entra ID, and other identity access control systems. The platform:

• Audits every AD and Entra change in real time

• Rolls back identity changes instantly

• Maps user access across hybrid environments

• Provides easy and complete visibility into user and group entitlements

• Alerts on risk before Copilot has a chance to surface it

Are you able to do the above today? If not, you need Cygna Labs.

Conclusion: Don’t Wait for Copilot to Make the Headlines

It’s not a question of if Copilot exposes something sensitive—it’s when. Secure your identity infrastructure before AI makes it someone else’s problem.