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4 in 5 Small Businesses Had Cyberattacks Last Year and Almost Half of Those Were AI Powered

Recently, the Identity Theft Resource Center found four out of five small businesses reported breaches in the past 12 months, with 41% of victims saying AI caused recent attacks.
Shifting to automated attacks, the report says attackers use generative AI for large-scale campaigns while multi-factor authentication adoption drops from around 33% in 2024 to around 27% in 2025.
Financially, many firms reported 37% lost over $500,000 last year, with 38% of affected small businesses raising prices while others used cash reserves, investors and insurers.
Insurers have tightened underwriting, and almost a quarter of companies reported difficulty obtaining cyber insurance after breaches, while fewer companies cut jobs—18%, down from 27%.
The report recommends immediate action, noting companies must study evolving threats and adapt cybersecurity with six pages of prevention tips, while urging consumers not to abandon protected businesses.

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4 in 5 small businesses had cyberattacks last year and almost half of those were AI powered

One more reason things cost more today: cybercrime. A survey by the Identity Theft Resource Center, a San Diego-based education and victim resource nonprofit, found that 38% of small businesses hit by a cyberscam or breach in the previous 12 months passed those losses to customers by raising prices. Another key finding: Cybercrime against small businesses is increasingly fueled by artificial intelligence. “The era of predictable, human-scale thr…

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