The Australian Signals Directorate’s (ASD) Annual Cyber Threat
Report 2025–26 describes a worsening threat environment in which
artificial intelligence is helping malicious actors operate
faster, at greater scale and with increasing sophistication.
Targets include government agencies, critical infrastructure
operators, private businesses and individuals.

During the financial year, ASD’s Australian Cyber Security
Centre responded to more than 1,500 cyber security incidents,
an increase of approximately 20 per cent on the previous year.
It also issued more than 4,400 notifications about potentially
malicious cyber activity, up almost 80 per cent. These
notifications included individual alerts and warnings sent
collectively to multiple organisations.

Hackers Positioning for Future Disruption

The report warns that state-sponsored cyber operations extend
beyond immediate espionage. Attackers are increasingly seeking
to maintain access inside networks, enabling future intelligence
collection, disruption or access to more valuable targets.

Such activity creates risks for the organisations and essential
services Australians rely on. A compromised network may provide
an adversary with an opportunity to interfere with operations
later, even when no immediate disruption is apparent.

AI Accelerates the Threat

ASD Director-General Abigail Bradshaw has warned that advances
in AI are allowing malicious actors to identify security
weaknesses and conduct attacks more quickly, precisely and
extensively.

The agency says organisations must strengthen basic cyber
security practices as AI accelerates the discovery of
vulnerabilities. Many systems supporting everyday services
still rely on older technology that was not designed for the
current threat environment, making modernisation increasingly
urgent.

AI is also making scams, phishing attempts and impersonation
more convincing. Criminals can use the technology to produce
persuasive messages and manipulate people into revealing
information or granting access to organisational systems.

Old Vulnerabilities Remain a Problem

Despite the growing sophistication of attackers, familiar
security weaknesses continue to expose Australian organisations.

ASD reported successful exploitation during the financial year
of a vulnerability first identified in 2008. The finding
highlights the continuing danger of leaving known weaknesses
unresolved, alongside the need to address newly discovered flaws.

The agency warns that AI is reducing the expertise and effort
required to identify and exploit vulnerabilities, potentially
allowing a wider range of attackers to conduct cyber operations.

AI Can Also Strengthen Defences

ASD says the same technologies reshaping the threat environment
can help organisations protect themselves.

AI tools can support earlier detection of vulnerabilities,
improve software quality, identify unusual network behaviour
and speed up incident response. However, they need to be
supported by reliable security controls and effective risk
management.

The report urges organisations to improve software patching,
reduce the exposure of outdated systems to the internet and
strengthen account protection through measures such as
multi-factor authentication and passkeys.

Its central message is that awareness must translate into
action: governments, businesses and individuals all have a role
in strengthening Australia’s cyber resilience.