Tech giant IBM (IBM) recently released its 2025 Cost of a Data Breach Report, which showed that companies are adopting artificial intelligence far faster than they are securing it. For the first time, the report looked at breaches that involved AI systems and found that 13% of organizations experienced an AI-related breach, while another 8% did not even know if they had been compromised. Among those affected, 97% lacked basic security controls for AI systems, which resulted in 60% of incidents exposing data and 31% disrupting operations.
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One major issue identified in the report is “shadow AI,” or unauthorized AI tools that are being used within organizations. These tools were linked to one in five breaches and typically cost $670,000 more to fix than breaches that did not involve shadow AI. They also exposed more sensitive data, such as personal information and intellectual property, compared to the global average. Furthermore, attackers themselves are now using AI in their methods, with 16% of breaches involving tactics like AI-driven phishing and deepfake impersonation. Despite these rising threats, 63% of breached companies have no formal AI governance policies, and even among those that do, only 34% regularly audit for unsanctioned AI use.
As a result, the financial impact of breaches is significant. Globally, the average cost of a breach dropped slightly to $4.44 million, but U.S. breaches reached a record $10.22 million. Healthcare breaches continue to be the most expensive, averaging $7.42 million, and take the longest to contain. Interestingly, though, organizations that use AI and automation in their security operations saved an average of $1.9 million in breach costs and shortened the time to resolve breaches by 80 days, which shows that AI can be a powerful defense when properly managed.
Is IBM a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on IBM stock based on seven Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average IBM price target of $297.33 per share implies 18.9% upside potential.
