This July, the company identified more than 200 instances of foreign adversaries using AI to create fake content online, more than double the number from July 2024 and more than ten times the number seen in 2023.

The findings, published Thursday in Microsoft’s annual digital threats report, show how foreign adversaries are adopting new and innovative tactics in their efforts to weaponize the internet as a tool for espionage and deception.

AI’s potential said to be exploited by US foes America’s adversaries, as well as criminal gangs and hacking companies, have exploited AI’s potential, using it to automate and improve cyberattacks, to spread inflammatory disinformation and to penetrate sensitive systems. AI can translate poorly worded phishing emails into fluent English, for example, as well as generate digital clones of senior government officials.

Government cyber operations often aim to obtain classified information, undermine supply chains, disrupt critical public services or spread disinformation. Cyber criminals on the other hand work for profit by stealing corporate secrets or using ransomware to extort payments from their victims. These gangs are responsible for the wide majority of cyberattacks in the world and in some cases have built partnerships with countries like Russia.

Increasingly, these attackers are using AI to target governments, businesses and critical systems like hospitals and transportation networks, according to Amy Hogan-Burney, Microsoft’s vice president for customer security and trust, who oversaw the report. Many U.S. companies and organizations, meanwhile, are getting by with outdated cyber defenses, even as Americans expand their networks with new digital connections.

Companies, governments, organizations and individuals must take the threat seriously if they are to protect themselves amid escalating digital threats, she said.

“We see this as a pivotal moment where innovation is going so fast,” Hogan-Burney said. “This is the year when you absolutely must invest in your cybersecurity basics,”

US is a popular target The U.S. is the top target for cyberattacks, with criminals and foreign adversaries targeting companies, governments and organizations in the U.S. more than any other country. Israel and Ukraine were the second and third most popular targets, showing how military conflicts involving those two nations have spilled over into the digital realm.

Russia, China and Iran have denied that they use cyber operations for espionage, disruption and disinformation. China, for instance, says the U.S. is trying to ” smear ” Beijing while conducting its own cyberattacks.

In a statement emailed to The Associated Press on Thursday, Iran’s mission to the United Nations said Iran rejects allegations that it is responsible for cyberattacks on the U.S. while reserving the right to defend itself.

“The Islamic Republic of Iran does not initiate any form of offensive cyber operation against any state,” the mission wrote in the statement. “However, as a victim of cyber operations, it will respond to any such threat in a manner proportionate to its nature and scale.”

North Korea has pioneered a scheme in which it uses AI personas to create American identities allowing them to apply for remote tech jobs. North Korea’s authoritarian government pockets the salaries, while the hackers use their access to steal secrets or install malware.

It’s the kind of digital threat that will face more American organizations in the years to come as sophisticated AI programs make it easier for bad actors to deceive, according to Nicole Jiang, CEO of Fable, a San Francisco-based security company that uses AI to sniff out fake employees. AI is not only a tool for hackers, but also a critical defense against digital attackers, Jiang said.

“Cyber is a cat-and-mouse game,” she said. “Access, data, information, money: That’s what they’re after.”

How AI Is Powering a New Era of Cyber Threats

• Disinformation and Espionage

  AI cyberattacks enable hackers to create realistic fake content, clone officials’ voices, and spread misinformation. These operations not only aim for espionage but also to disrupt supply chains and weaken public trust.

• AI-Enhanced Hacking Capabilities

  Attackers use AI to refine phishing emails, crack passwords faster, and evade detection systems. This has made AI cyberattacks more precise, scalable, and destructive.

Why the US Is the Prime Target

The United States remains the top target of AI cyberattacks, followed by Israel and Ukraine. The ongoing geopolitical tensions have intensified digital warfare, where cybercriminals and state-sponsored hackers use AI to exploit vulnerabilities in financial systems, defense networks, and public services.

How Organizations Can Defend Against AI Cyberattacks

To combat AI cyberattacks, experts recommend continuous monitoring, AI-based intrusion detection, and adopting zero-trust architecture. Collaboration with cybersecurity providers such as IT Monteur can help businesses secure data, mitigate AI-driven risks, and ensure compliance with international cyber defense standards.