The AI revolution has gone mainstream—but security has not kept up. According to Cycode’s new State of Product Security for the AI Era 2026 report, nearly every enterprise now uses AI coding assistants, yet most admit they have little idea where or how those tools are operating within their organizations.
The report, based on a survey of over 400 CISOs and security leaders, paints a sobering picture: 97% of companies are already using or piloting AI coding tools, 100% have AI-generated code in production, and 81% lack visibility into that AI activity. Meanwhile, 65% say AI has increased their overall security risk.
The takeaway? AI isn’t a security threat waiting to happen—it’s already embedded in the software supply chain, and it’s running largely unchecked.
The Productivity Boom Meets Its Dark Twin
AI coding assistants have transformed how developers work. 78% of respondents say AI boosts productivity, 79% say it improves code quality, and 72% report faster time to market.
But those gains have come with an equally dramatic rise in risk. More than half (52%) of organizations have no formal AI governance framework, allowing AI tools and models to proliferate across teams and geographies without oversight—a phenomenon Cycode dubs “Shadow AI.”
“AI development is no longer a future trend; it’s today’s reality,” said Lior Levy, CEO and co-founder of Cycode. “The stage is set for a significant supply chain breach, with Shadow AI as the attack vector. It’s no longer enough to find vulnerabilities—we need full visibility and governance over the entire AI toolchain.”
Levy says that’s where Cycode’s AI-native application security platform comes in, offering enterprises end-to-end visibility, policy enforcement, and automated controls “from prompt to production.”
Consolidation Replaces Tool Sprawl
Beyond the rising risk, the report signals a major market consolidation trend. Nearly every respondent (97%) plans to unify their application security stack in the next 12 months—an explicit rejection of the “tool sprawl” that has long plagued enterprise security teams.
Instead of bolting on niche tools, leaders are centralizing visibility and governance under unified platforms that can track both human and AI-driven code contributions. And every single organization surveyed—100%—plans to increase investment in AI-related security initiatives this year.
“As enterprises accelerate AI-driven development, the attack surface is expanding faster than legacy controls can manage,” said Katie Norton, Research Manager at IDC. “The rise of Shadow AI compounds this challenge, creating layers of exposure that often can’t be seen or governed. Consolidation and context-driven platforms are now critical to keeping security aligned with the pace of AI.”
The New Security Mandate: Govern the Machines That Build
The report underscores a profound inflection point for cybersecurity. AI has already taken over much of the coding process—30% of organizations say AI now creates the majority of their code—but oversight hasn’t followed.
This imbalance, Cycode warns, could become the next major supply chain threat if left unaddressed. As AI tools continue to write, refactor, and deploy code at scale, organizations that fail to govern their AI pipelines risk introducing vulnerabilities faster than they can patch them.
In short: the AI that builds your software may also be building your next breach—unless governance catches up.
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