Global enterprises scramble as AI-powered cyber threats drain security budgets

Over 60% of IT directors strongly agree – and 37% partially agree – with the assertion that the convergence of the Metaverse and AI will significantly escalate cyber attacks. Hackers are expected to exploit AI and machine learning to create more sophisticated methods, making the Metaverse a prime target.

“The Metaverse, combined with AI-driven hacking, presents a perfect storm of vulnerabilities,” warned David Carvalho, CEO of Naoris Protocol.

The study* also pinpoints heightened cyber risks in the Web3 space. Web3 (also known as Web 3.0) is an idea for a new iteration of the World Wide Web, which incorporates concepts such as dcentralisation, blockchain technologies and token-based economics.

While decentralised technologies offer opportunities, they also bring new threats. Only 35% of IT directors believe their organisations fully understand Web3-related risks, 46% rate their knowledge as ‘quite good’ and 19% report their average or poor comprehension. Around 12% say their organisation has an average understanding, while 7% admit to either a poor or very poor understanding of the cyber risks posed by Web3 This knowledge gap could expose critical systems to exploitation as organisations navigate decentralisation and blockchain complexities.

Some of the biggest hacks in 2024 included DMM Bitcoin in May and WazirX in July. This underscores the growing need to secure mechanisms frequently exploited in hacks, such as private keys.

Overall, Web3 security breaches led to cryptocurrency losses representing a 31.6% increase when compared to 2023. That’s according to blockchain security firm Certik.

Budgets on the rise 

Cyber security budgets are set to grow significantly as risks rise. Over the past two years, 38% of IT directors reported dramatic budgetary increases, while 47% witnessed moderate growth and 15% suggest that s unchanged. Looking ahead, 97% expect further increases, with 25% predicting over 50% growth and 61% anticipating increases between 10% and 50% across the next two years. 

What will happen to cyber security budgets over the next two years?

*11% expect increases of up to 10%

*35% foresee growth between 10% and 25%

*26% predict a 25%-50% rise

*15% expect jumps of 50%-75%

*10% project budget increases of over 75%

*7% project budget increases of over 75%

DePIN: the future of cost-effective cyber security?

Decentralised Physical Infrastructure Networks (DePINs) are emerging as a promising solution for reducing the financial and operational impacts of cyber incidents. According to the study, 32% of IT directors believe adopting DePIN-based cyber security measures could significantly reduce costs, while 48% see a moderate impact.

Naoris Protocol’s collaboration with the DePIN Association highlights its dedication to advancing cyber security and digital trust through a decentralised, post-quantum approach, in turn benefiting industries including the finance sector, telecommunications and healthcare. 

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“The rapid evolution of the cyber threat landscape demands equally agile responses,” stated Carvalho. “Organisations must not only expand their cyber security budgets, but also embrace innovative technologies like decentralised solutions to stay ahead of attackers.”

With the Metaverse expanding and AI threats evolving, Naoris Protocol’s research highlights the urgent need for organisations to adopt robust and forward-thinking cyber security strategies in order to tackle the challenges of a rapidly changing digital era.

*For the purposes of the study, Naoris Protocol commissioned independent research company Pure Profile to interview 100 IT directors based in the UK, the US, the European Union and the APAC region. The research was conducted during October 2024 using an online methodology