Secure Your AI Advantage: A Guide for Business Leaders

AI isn't just a powerful tool for business transformation; it's a strategic imperative that also introduces new security challenges. Read on for a clear playbook on how to embrace AI to drive growth and efficiency while building the governance, culture, and security frameworks needed to win in an AI-first world. Learn to leverage AI confidently and securely, turning security into a competitive advantage.

What AI security terms should business leaders know?

Successful digital transformation requires CXOs to master core AI security terms to proactively manage and mitigate the unique risks introduced by artificial intelligence. Understanding these concepts with real-world context enables leaders to make informed decisions about AI adoption.

Generative AI Image

Generative AI (GenAI) is a type of artificial intelligence capable of creating new and original content across various forms, including text, images, audio, video and code. Unlike traditional AI that primarily analyzes existing data or follows predefined rules, GenAI learns patterns and structures from vast datasets to generate new outputs that are based on given prompts and often mimic human creativity. The most recognized form of GenAI is the Large Language Model (LLM), which powers tools like ChatGPT. LLMs are sophisticated prediction machines, capable of generating coherent, relevant text by statistically predicting the most likely next word in a sequence.

GenAI isn’t just a technological advancement, it's a strategic imperative that can fundamentally reshape business models and provide significant competitive advantages. For example, GenAI can be used to power highly sophisticated chatbots and virtual assistants that engage customers in natural, nuanced conversations. By offering personalized customer experiences at scale, organizations can enhance customer satisfaction, drive higher conversion rates and build stronger brand loyalty.

Using and integrating third-party GenAI models and APIs also expands an organization's attack surface. If a model is "poisoned" with malicious data during its training, the code or content it generates could contain hidden vulnerabilities, compromising systems.

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AI agent Image

An AI agent is an advanced form of artificial intelligence designed to autonomously perceive its environment, make decisions and take actions to achieve specific goals, often without continuous human intervention. Unlike simpler AI systems that might perform a single task, an AI agent can demonstrate a level of self-direction, adapting its behavior based on new information and working toward a defined objective. Agentic AI builds on generative AI, using LLMs as a "brain" for reasoning, planning and decision-making to achieve goals autonomously.

Agentic AI can be used to provide proactive, real-time strategic insights, enabling faster and more informed decision-making.

For example, an AI agent can continuously monitor global news, social media, financial reports and competitor activities across multiple languages and platforms. It can then autonomously synthesize this vast information, identify emerging market trends, predict competitor moves and even generate concise strategic recommendations or risk assessments. This could empower organizations to anticipate market shifts, seize new opportunities and maintain a competitive edge, transforming raw data into actionable intelligence.

The same capabilities that make AI agents revolutionary also create profound security challenges. An AI agent can save millions in losses by flagging and pausing suspicious transactions before they clear. However, if that agent is compromised, an attacker could instruct it to approve fraudulent transfers or manipulate the logic for personal gain.

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Shadow IT Image

Shadow AI is the use of unauthorized or unvetted artificial intelligence tools, models, and platforms by employees within the enterprise, bypassing formal IT and security oversight.

It’s the evolution of Shadow IT, which refers to the use of any technology, including software, hardware, cloud services and applications, by employees or departments without the knowledge, approval or oversight of the official IT organization. Driven by employee desire for speed and productivity, shadow IT has become increasingly prevalent with the widespread availability of user-friendly, cloud-based tools and, more recently, generative AI services that promise to simplify and accelerate work.

Shadow AI is a significant and growing enterprise risk management concern with direct implications for cybersecurity, compliance and intellectual property.

For example, an employee using an unauthorized cloud-based, file-sharing service to collaborate with an external partner could inadvertently upload sensitive corporate data, such as customer lists, financial reports or product development plans. With the rise of shadow AI, an employee might paste proprietary code or confidential client data into a public large language model (LLM) to summarize or debug it.

For senior leadership, the challenge of shadow AI isn't just about control; it's about balancing employee productivity and agility with the fundamental need for security and governance. Proactively addressing this requires a strategic approach that includes transparent policies, education and providing employees with approved, secure and user-friendly AI tools that meet their needs.

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AI governance Image

AI security governance is the strategic framework of policies, roles, standards, and oversight mechanisms that an organization puts in place to manage the security risks associated with the development, deployment, and use of Artificial Intelligence (AI) and Machine Learning (ML) systems. It ensures that AI is used securely, ethically, and in a way that aligns with the enterprise's security posture, regulatory requirements, and business objectives.

AI governance is the framework of policies, principles and practices that an organization establishes to ensure its AI systems are developed, deployed and used in a safe, ethical and compliant manner. The strategic oversight of AI prevents the technology from becoming a liability.

Without AI governance, organizations are exposed to legal and regulatory risk from compliance violations (e.g., GDPR, CCPA). Lack of governance also creates a chaotic environment where unvetted and unsanctioned AI tools can introduce vulnerabilities, making it impossible to enforce a consistent security posture across the enterprise. Governance allows for responsible scaling of AI innovation.

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What security threats and challenges to AI success should I know about?

The benefits of GenAI will have positive business impacts for every company that adopts this revolutionary technology. But to see this impact, it must be adopted securely from the beginning.

As LLMs and GenAI become deeply integrated into critical operations and decision-making processes, adversaries can exploit subtle vulnerabilities to manipulate your model outputs to coerce unauthorized behaviors or compromise sensitive information.

Securing your GenAI ecosystem is critical to safeguard sensitive data, maintain regulatory compliance, protect intellectual property and ensure the continued trustworthiness and safe integration of AI into core business functions.

88%

Prompt-based attacks can have a success rate as high as 88%.

10%

Organizations used on average 66 GenAI apps, with 10% classified as high risk.

Whether you are a business leader, developer or security professional, understanding security and privacy risks and challenges is essential.

GenAI traffic experienced an explosive surge of over 890% in 2024.

890%

The average monthly number of GenAI-related data security incidents increased.

2.5X

  • GenAI traffic experienced an explosive surge of over 890% in 2024. This surge reflects growing enterprise reliance on mature AI models and measurable productivity gains.

  • The average monthly number of GenAI-related data security incidents increased 2.5 times, now accounting for 14% of all data security incidents across SaaS traffic according to the State of GenAI in 2025 report.

  • Organizations used on average 66 GenAI apps, with 10% classified as high risk.

  • Prompt-based attacks can have a success rate as high as 88%.

Three vectors subject to attack are:

Prompt attacks (specifically prompt injection) are a significant security concern for both generative and agentic AI. These attacks exploit the fact that LLMs interpret user input as instructions.

Attackers manipulate prompts to alter the model’s intended behavior. For example, by framing malicious instructions as a storytelling task, an attacker can trick an LLM into generating unintended responses.

Attackers circumvent your security controls, such as system prompts, training data constraints or input filters. This can include obfuscating disallowed instructions using encoding techniques or exploiting plugin permissions to generate harmful content or execute malicious scripts.

These attacks can extract your sensitive data, such as system prompts or proprietary training data. Techniques include reconnaissance on applications and replay attacks designed to retrieve confidential information from prior interactions.

Prompts are crafted to exploit your system resources or execute unauthorized code. Examples include consuming excessive computational power or triggering remote code execution, which can compromise application integrity.

Palo Alto Networks AI Research Key Points and Findings

  • Generative AI is revolutionizing productivity, but it’s introducing critical security vulnerabilities that can compromise your sensitive data and information.

  • Leading LLMs remain highly vulnerable to prompt attacks. Prompt-based attacks can have a success rate as high as 88%.

  • There is an urgent need for a comprehensive understanding of prompt-based threats and a taxonomy classifying all known and emerging prompt attacks. A structured framework enables organizations to systematically assess risks, develop proactive defense strategies and enhance the security of GenAI systems against adversarial manipulation.

  • To effectively detect and prevent both existing and emerging prompt attacks, organizations must implement a holistic, multilayered security strategy for GenAI systems.

  • Our analysis uncovers significant security implications of third-party GenAI app use:

  • GenAI traffic surged more than 890% in 2024. This surge reflects growing enterprise reliance on mature AI models and measurable productivity gains.

    Securing GenAI
  • Data loss prevention (DLP) incidents for GenAI more than doubled. The rise of GenAI is also correlated with an increase in data security incidents.

  • The average monthly number of GenAI-related data security incidents increased 2.5 times, now accounting for 14% of all data security incidents across SaaS traffic according to the report.

    Securing GenAI
  • Organizations used on average 66 GenAI apps, with 10% classified as high risk.

  • While GenAI unlocks innovation and accelerates competition, the proliferation of unauthorized AI tools is exposing organizations to greater risk of data leakage, compliance failures and security challenges.

  • Prioritizing AI agent system security is essential.

  • To keep AI agents from being attacked and to address the security gaps in AI agents, a "security-first" design approach is crucial and adaptive; multilayered security strategies are necessary.

  • The frameworks we use to secure traditional applications aren’t enough. We are encountering problems that aren’t merely variations on known vulnerabilities but are fundamentally new. The attack surface has shifted. This mindset shift is why the security landscape has been organized around three core concerns:

    • Protecting AI agents from third-party compromise: How to safeguard the AI agents themselves from being taken over or manipulated by external attackers.

    • Protecting users and organizations from the agents themselves: How to ensure that the AI agents, even when operating as intended or if they malfunction, do not harm their users or the organizations they serve.

    • Protecting critical systems from malicious agents: How to defend essential infrastructure and systems against AI agents that are intentionally designed and deployed to cause harm.

  • Securing agentic AI will not come from any single breakthrough but from a sustained, multistakeholder effort. These include researchers, policymakers, practitioners and industry leaders working together across disciplines.

State of GenAI

Unlock Your AI Advantage: Listen and Learn from the Experts

Press play on next-level intelligence and hear security experts discuss trends and topics.

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Securing GenAI: A Deep Dive into Prompt Attacks and GenAI Security Solutions

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Threat Vector: Securing the Future of AI Agents

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What does an AI-first enterprise look like for my organization?

Why Culture is the First Line of Defense in the Age of Agentic AI?

The arrival of agentic AI rewrites the rules of engagement for cybersecurity. As new tools and workflows create novel attack surfaces, the velocity and sophistication of AI-driven threats now demand a response that transcends technology alone. This new reality calls for a profound shift in our thinking toward a security-conscious culture, one where trust and empowerment form our first line of defense.

Every part of a business must embrace security as its own critical responsibility. This means ensuring our employees are well equipped and empowered to make sound, secure decisions. It means fostering an environment where people feel comfortable speaking up when they spot something that doesn’t seem right. And, critically, it means ensuring every leader across the business knows how to communicate and collaborate effectively if the worst happens and a breach occurs.

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Culture: The Ultimate Human Firewall

“It goes beyond just technology. It’s about acquiring the latest tools and having brilliant people concentrated solely on the security team. Fundamentally, it’s about cultivating a pervasive, deeply ingrained security culture within every organization.”

Wendi Whitmore

Wendi Whitmore

Chief Security Intelligence Officer

What does this culture look like in practice?

Shared responsibility

From the legal department to operations, finance to HR, every single part of the business must recognize and internalize that security is their responsibility too.

Empowerment

Our employees must be well positioned and genuinely empowered to make secure decisions in their daily work. They need to feel it’s both safe and encouraged to raise their hand when they see something that doesn’t look right.

Communication and preparedness

Our leaders across the business must clearly understand their roles and responsibilities. Crucially, they must know how to communicate effectively with one another and with security teams if a breach occurs. The more we practice and test our responses to various scenarios, the better prepared and more secure our organizations will inevitably be.

How do I get started… and how do I get this right?

Traditional security measures are often insufficient to address these evolving, semantically driven threats, highlighting critical blind spots and a need for a proactive, multilayered governance strategy.

The Governance Gap — Regulation and Business Risk

“Compounding the risk is a fast-evolving regulatory landscape, where noncompliance with emerging AI and data laws can result in severe penalties. Governments and regulatory bodies worldwide are working to catch up with AI's rapid advancement, which can create uncertainty for businesses. Some laws demand extreme caution in the handling and sharing of personal data with GenAI applications.

The uncomfortable truth is that for all its productivity gains, there are many growing concerns — including data loss from sensitive trade secrets or source code shared on unapproved AI platforms. There’s also the risk in using unvetted GenAI tools that are vulnerable to poisoned outputs, phishing scams and malware disguised as legitimate AI responses.”

Anand Oswal

Anand Oswal

Executive Vice President, Products, Palo Alto Networks

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“It will be important to be proactive in this capacity, as the governance and oversight practices are still being established…New paradigms and technologies are needed. Adapting existing paradigms is a critical first step in evolving to address the emerging novel differences.”

 Dr. Nicole Nichols

Dr. Nicole Nichols

Distinguished Machine Learning Engineer,
Palo Alto Networks

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Navigating the AI Frontier: A CXO Playbook for Secure AI Governance

Artificial intelligence is not just a technological advancement; it's a fundamental shift transforming industries and driving unprecedented innovation and efficiency. Organizations are embracing AI-powered applications at a remarkable pace, with 100% of survey respondents in the report Establishing a Governance Framework for AI-Powered Applications confirming their adoption of AI-assisted application development. However, this rapid integration introduces novel security risks and governance challenges that traditional cybersecurity approaches are simply not equipped to handle.

For chief executive officers and senior business leaders, establishing robust AI governance is no longer optional — it's imperative. AI governance provides the essential policies, procedures and ethical guardrails to ensure your AI initiatives operate within legal and ethical boundaries, align with organizational values and safeguard stakeholder interests. This playbook outlines key strategies to build a successful AI governance framework, prioritizing security from conception to deployment.

An Essential AI Security Playbook for Business Leaders

Successfully integrating AI while mitigating its inherent risks requires a proactive, security-first approach that starts at the executive level. Here's how to establish an AI governance framework that embeds security at every step, empowering your organization to harness AI's full potential responsibly:

Begin by securing strong executive sponsorship from the board or a dedicated committee to champion AI initiatives and overcome potential barriers. Define and promote foundational guiding principles for AI development and use, ensuring they reflect your organization's strategy, culture and values, thus enabling innovation without stifling it. Crucially, embed the principle of "Secure AI by Design" into your AI strategy from the outset, requiring close collaboration between security, legal and AI development teams to integrate necessary controls throughout the AI lifecycle. Involve your CISO early and consistently to ensure a unified understanding and definition of AI governance, balancing value and risk at every turn.

A successful AI governance program hinges on unprecedented visibility and stringent control over your AI ecosystem. You must gain a clear understanding of how AI is being used across the organization by establishing comprehensive inventories of all AI models and datasets. This includes detailing their purpose, use cases, training data sources and access permissions. Develop clear policies for sanctioned and unsanctioned AI models, with rigorous vetting and approval processes for new models that assess their provenance, testing and alignment with organizational values and compliance. Crucially, implement robust data governance practices to prevent data poisoning, ensuring strong access controls and continuous data flow monitoring for all data used in training, inference and fine-tuning.

Move beyond traditional cybersecurity frameworks by adopting AI TRiSM technology to manage the unique trust, risk and security aspects of AI models, applications and agents. This involves implementing safety protocols for the deployment and operation of AI systems, including AI workload protection. Continuously monitor trends and threats specific to AI security, reinforcing methods to assess exposure to unpredictable threats. Your risk framework should identify potential vulnerabilities, map risks to mitigation plans and conduct regular assessments for each AI use case. Furthermore, actively manage vendor risks by collaborating with internal stakeholders to define accountability requirements and AI governance guidelines for inclusion in vendor evaluations and contracts, demanding transparency from all AI solution providers.

Build an organizational culture where accountability and transparency are paramount in AI development and deployment. Clearly define roles and responsibilities for all stakeholders in AI projects and establish a dedicated AI Governance Committee with cross-departmental representation to oversee initiatives. Mandate transparency and explainability in your AI systems, ensuring that their decision-making processes are understandable to stakeholders through documentation, interpretable machine learning techniques and human monitoring. Finally, establish a proactive approach to regulatory compliance, continuously monitoring the evolving global AI legal landscape — from GDPR and CCPA to emerging AI-specific regulations like the EU AI Act. Conduct regular audits and reviews to maintain adherence to ethical standards, legal requirements and performance benchmarks.