Cyber Budgets Stall, But AI Spending Surges as Top Priority

A new report from cyber advisory firm IANS shows that while overall security budgets have flatlined for the second year in a row, artificial intelligence is capturing the lion's share of new investment. The 2026 Security Budget Benchmark Report, based on interviews with 500 US security executives, found that 69% of respondents named AI as their top priority for incremental spending, well ahead of other growing areas like security operations automation and identity access management. This shift has pushed software spending to 35% of total security budgets, up from 29% last year, and now nearly on par with staff and compensation costs.

Despite the AI boom, more than half of respondents (55%) reported flat or reduced budgets overall, largely due to broader economic pressures. Growth was uneven across organisation types: 71% of venture capital backed companies increased their security spend, often by more than 10%, compared with just 52% of publicly listed companies.

Importantly, the report found little evidence that AI is displacing security jobs. Around 69% of CISOs said they don't expect headcount cuts due to AI, and 81% believe it will actually create demand for new roles and skills. Most respondents said AI is boosting team productivity and freeing staff for higher value work, though experts note human judgement remains essential for spotting anomalies and prioritising real threats.