CISOs Face Budget Challenges Despite Increased Security Spending

While security budgets show a nominal growth of 5% this year compared to 4% last year, the reality for many Chief Information Security Officers (CISOs) is less rosy. The median budget growth remains stagnant at 0%, leaving 55% of CISOs reporting either unchanged or reduced budgets despite 64% seeking increases.

This paradox comes from the latest IANS and Artico Search 2026 Security Budget report, which gathered insights from over 500 security executives between April and August 2026. The disparity in budget allocations often mirrors company performance: organizations exceeding revenue targets by more than 5% were more than twice as likely to see substantial budget increases compared to their peers who merely met expectations. In fact, while only 15% of companies that met targets saw double-digit increases, 41% of those who excelled did. On the flip side, 22% of businesses not meeting expectations opted to cut security expenditures.

Ownership structure is also a key factor. A striking 71% of venture-backed companies managed to boost security budgets, starkly contrasting with only 52% of publicly traded firms. Notably, government and nonprofit sectors experienced the lowest growth, often seeing the smallest budget increases.

Interestingly, the justification for budget enhancements doesn't always center on preventing breaches. Operational or business risks drove increases for 48% of CISOs, while new regulatory requirements and heightened focus from corporate leadership were cited as critical drivers—averaging increases of 22% and 23%, respectively. Only a mere 3% of CISOs identified a major breach as a reason for increased funding.

AI Spending Trends in Security Budgets

A significant portion of the new funding is flowing into artificial intelligence, with 69% of CISOs prioritizing AI as their foremost new investment target. Steve Martano from IANS explains that “security is gaining tailwinds from other investments in AI and broader technology,” suggesting that some security features are indirectly backed by other departmental budgets.

Despite this trend, just 24% of organizations maintain separate budget lines to track AI spending within security, with 38% embedding it into their security budget and another 38% funding it from IT, data, or innovation pools. This fragmented budgeting approach often results in underreported funding for AI security measures. The report reveals that organizations specifically monitoring AI expenditures saw increases in budget approval roughly 70% of the time, compared to only 42% for those embedding AI spend in the general budget and 31% for those relying on alternative funding channels.

It's important to note that this increased allocation toward AI in security doesn't equate to job losses; rather, 81% of CISOs believe that AI will create the demand for new roles. In fact, 69% predict stability in existing headcount, indicating a shift in focus rather than outright replacement.

As organizations strive to adapt, CISOs are now looking for staff who can manage responses and make strategic decisions beyond the scope of AI's capabilities. Martano points out that while AI and automation are incorporated into security workflows, they have necessitated a restructuring of roles rather than outright reductions in personnel.

Divergence in attitudes and planning around AI security investment is evident, especially between firms committing to significant AI security spending and those without distinct plans. For aggressive AI spenders—those planning over a 10% increase—the understanding of AI risks among leadership was notably higher, with 79% demonstrating at least a moderate understanding compared to just 33% among non-spenders. Similarly, 70% of aggressive spenders reported having a defined governance framework for AI initiatives, whereas only 34% of non-investing organizations could claim the same.

Effective security funding is closely tied to overall budget trends. Among the aggressive spenders, 45% had increased their overall security budgets by more than 5%, with 51% forecasting similar growth for the next fiscal year. In contrast, non-AI-spenders reported only 12% seeing such increases, with an even smaller nine percent expecting further growth.

The report ends with a strategic recommendation for CISOs: to advocate for a distinct budget line for AI initiatives. This approach not only aids in tracking costs more accurately but also empowers better planning ahead of the forthcoming budget cycle.