As organizations head into 2026, cybersecurity risk is entering what Moody's Ratings describes as a "new era of adaptive, fast-evolving threats"—driven largely by the rapid proliferation of artificial intelligence on both sides of the attack-defense equation.
Moody's 2026 Cyber Risk Outlook makes one point abundantly clear: AI is not just another tool in the cyber arsenal; it is fundamentally altering the speed, scale, and unpredictability of cyber risk across sectors. For CISOs, boards, and enterprise risk leaders, this shift has profound implications for how cyber risk is identified, mitigated, and governed.
Moody's finds that AI has already amplified existing attack techniques rather than introducing entirely new ones—but the consequences are significant. AI-enhanced phishing and deepfake scams are more convincing, more personalized, and harder to detect than traditional campaigns.
Looking ahead, the report warns that attackers are likely to deploy malware capable of rewriting its own code, exploiting previously unknown vulnerabilities, and launching automated campaigns against thousands of targets simultaneously. AI is also being used to automate vulnerability discovery—continuously scanning networks and applications for misconfigurations or missing patches at machine speed, often outpacing defenders' ability to remediate.
Moody's emphasizes that this compression of the attack timeline makes rapid detection and response critical, especially as AI-driven social engineering reduces the margin for human error.
Where vulnerabilities are growing across sectors
1. AI governance and data exposure
One of the most concerning findings is the lack of maturity in AI governance. Moody's 2025 Cyber Survey found that only 29% of global organizations follow the OWASP Top 10 for Large Language Model (LLM) Applications, leaving many exposed to data leakage, prompt injection, and access control failures.
AI systems often require broad access to proprietary or sensitive data to function effectively. Without strict access controls, these permissions can create searchable exposure of payroll, customer, or intellectual property data, introducing compliance and privacy risks that many organizations are unprepared to manage.
2. Large enterprises and ransomware exposure
Ransomware remains a top-tier threat, but its impact is diverging by organization size. Moody's notes that 44% of ransomware attempts in 2025 were stopped before encryption, up from 27% in 2024, reflecting improved detection and resilience.
However, large organizations remain disproportionately exposed. Their network complexity creates blind spots, and their greater ability to pay makes them attractive targets. Firms with 3,000–5,000 employees still experienced encryption in 65% of ransomware incidents, far higher than smaller or mid-sized peers.
3. Cryptocurrency and digital asset ecosystems
As digital assets move from the fringe into mainstream finance, cyber risk is becoming a credit and liquidity issue, not just a technical one. Moody's highlights that nearly 90% of total value lost in DeFi hacks stems from unaudited code deployments, and more than 80% of stolen funds came from "off-chain" compromises such as wallet management and operational weaknesses.
The 2025 Bybit breach—resulting in roughly $1.46 billion in stolen Ether—demonstrates how operational deception and interface manipulation can trigger systemic consequences, including bank-run-like withdrawal events.
4. Cloud concentration and systemic risk
Moody's also points to cloud computing outages as a growing systemic risk. Outages at AWS, Azure, and Cloudflare in 2025 were technical rather than malicious, but they illustrate the potential blast radius if a major provider were compromised. A one-day outage at a primary cloud provider can cost customers around 1% of annual revenue, according to cited insurance data.
What CISOs and security teams should do now
Proactively
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Adopt AI-powered defenses with strong governance: AI security tools are no longer optional, but Moody's cautions they are not a silver bullet. Organizations must pair automation with oversight, guardrails, and clear accountability.
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Harden AI development and usage: Enforce OWASP LLM guidelines, restrict model permissions, and monitor for prompt injection, model poisoning, and data leakage.
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Design for resilience, not perfection: Invest in backups, multi-region cloud architectures, and realistic outage simulations to reduce business impact when—not if—systems fail.
Reactively
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Accelerate detection and response: As AI compresses attacker timelines, manual incident response will fall behind. Automated containment and response capabilities are essential.
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Plan for extortion-only scenarios: With encryption declining and data extortion rising, incident response plans must account for reputational, regulatory, and disclosure risks even when systems remain operational.
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Coordinate across risk, legal, and finance: Cyber incidents increasingly carry credit, liquidity, and regulatory consequences, requiring cross-functional decision-making under pressure.
Moody's outlook underscores that cybersecurity is now a foundational element of operational resilience and financial stability—not a discretionary IT function. For public-sector entities, this means heightened scrutiny of critical infrastructure, cloud dependencies, and AI usage. For private enterprises, cyber maturity increasingly affects capital access, investor confidence, and competitive positioning.
As digital assets, AI systems, and cloud platforms become more central to business models, organizations that cannot demonstrate robust cyber governance may face capital flight, consolidation, or exclusion from critical markets.
Moody's 2026 Cyber Risk Outlook—one of several outlook reports available—makes clear that AI will intensify the strategic chess match between attackers and defenders, reshaping the cyber threat landscape across industries. The winners will not be those who try to eliminate risk entirely, but those who build adaptive, AI-enabled, and resilient security programs capable of responding at the speed of modern attacks.
For CISOs and their teams, 2026 is not just another year of incremental improvement; it is a test of whether cybersecurity can evolve fast enough to remain a stabilizing force in an increasingly automated, interconnected world.
