Australian organisations boost cybersecurity spend as AI threats grow

Australian organisations are planning substantial increases in cybersecurity spending over the next year, with a growing focus on artificial intelligence as both a threat and a defensive tool, according to PwC Australia's 2026 Digital Trust Insights report.

The report, based on a survey of more than 100 Australian business and technology leaders and part of a wider global study encompassing over 3,800 executives in 70 countries, indicates that 75% of organisations in Australia expect their cybersecurity budgets to increase over the coming 12 months. This is set against a backdrop of intensifying AI-enabled cyber threats and ongoing skills shortages.

AI drives cyber priorities

The research highlights that 37% of Australian respondents have made AI their foremost cyber investment priority, reflecting widespread concern about the use of AI by cybercriminals and the broader implications for organisational security. Over half of the organisations expressed concerns about AI-driven malware and supply chain attacks, which has pushed AI to the top of cyber agendas.

Despite this increased focus and investment, half of organisations surveyed said that they face significant challenges due to a lack of knowledge and expertise in applying AI for cyber defence. As a result, 50% plan to prioritise upskilling and reskilling their teams over the next year to address these gaps.

"AI is transforming cybersecurity across the world. The integration of AI into cybersecurity is a double-edged sword with adversaries experimenting with AI-powered cyberattacks, while Australian organisations are leaning in and investing in skills and responsible AI to strengthen defences and build digital trust."

Robert Di Pietro, Cybersecurity and Privacy Partner at PwC Australia, provided this perspective. He also noted, "It is important Australian companies stay vigilant and proactive in leveraging AI to strengthen their security systems, while also understanding the new risks brought about by AI technology."

Skills deficits and budget increases

The Digital Trust Insights report found that the skills deficit ranks among the top two hurdles for Australian firms as they attempt to implement AI for cyber defence. The lack of expertise not only challenges effective deployment of new technologies but also exposes organisations to escalating threats.

According to Di Pietro, "The survey found 50% of organisations will focus on upskilling and re-skilling over the next 12 months to fill critical cyber skills gaps, and over half of respondents will prioritise AI event detection and behavioural analytics. This differs from the global trend, where companies are prioritising AI threat hunting."

Budget increases are a clear signal of the commitment to improved cybersecurity, with nearly 75% of Australian respondents reporting plans to spend more in the next 12 months. Only 13% expect a decrease, more than twice the global average of 6% reporting a planned reduction.

The survey also found a divergence between Australian and global priorities. While nearly half of local leaders intend to focus spending on preparedness improvements, only 35% are prioritising data protection and trust, compared to 44% on a global scale.

Di Pietro commented on this trend: "Sustained and strategic investment in cyber capabilities is essential to defend against emerging threats, especially as we see an increased prevalence of threats caused by artificial intelligence and quantum computing." He continued, "As companies continue to deal with a growing list of cyber risks, the findings underscore the need for Australian organisations to accelerate their investment in data protection strategies to keep pace with global security standards and reduce vulnerabilities."

Quantum computing concerns

The report revealed a unique concern among Australian organisations about quantum computing. One-third identified quantum technologies as a significant risk, noticeably higher than the 26% global average. In contrast, only 19% of Australian businesses expressed concern about data poisoning, a vulnerability exacerbated by integrating AI tools into operations.

Di Pietro concluded, "The 2026 Digital Trust Insights survey underscores the critical need for Australian organisations to elevate their cybersecurity strategies by strengthening the foundations - including data governance and digital identities - to enable safe and secure adoption of emerging technological threats such as quantum computing and AI-driven attacks."