AI Has Flipped Cybersecurity Economics Into A Race For Power

Cybersecurity is no longer just about protecting data. It is about defending and projecting national power—and Woody Preucil argues that superintelligence is changing the economics of that defense in the attacker’s favor.

For Preucil, Senior Managing Director at 13D Research and Strategy, the implications extend from corporate balance sheets to military readiness. The result, he says, is “a mandatory reallocation of global capital.”

From the IT Department to National Defense

Preucil describes cybersecurity’s transformation in stark terms: it has moved from “a technical IT function managed in the basement of an enterprise to a central pillar of national power.”

In his analysis, sovereignty increasingly depends on the resilience of digital infrastructure—not simply territorial control. Server racks, undersea cables, and encryption systems have become essential components of national security.

Citing estimates of roughly $10 trillion in annual global economic losses from cyberattacks, Preucil argues that the stakes are already enormous. AI is making the challenge more difficult by moving beyond assistance into active execution.

“AI is becoming an active cyberattack operator—running intrusions at a speed and scale that overwhelm traditional defenses.”

The Economics Favor the Attacker

The central problem, Preucil explains, is that AI can accelerate the entire intrusion process, from reconnaissance to data theft. Coordinated autonomous agents can divide the work, combining specialized capabilities into a more powerful attack system.

Meanwhile, AI’s ability to identify previously unknown software vulnerabilities threatens to outpace organizations’ ability to patch them.

“It’s flipped the economics of a cyberattack: it’s now exponentially cheaper to attack than to defend,” he says.

Defenders are adopting the same technology, but that does not end the competition. Instead, Preucil sees a self-reinforcing cycle in which stronger defenses provoke more sophisticated attacks.

“Now with AI, it’s becoming a contest of AI against AI.”

Why Cybersecurity Spending Must Rise

That escalating contest underpins Preucil’s long-term investment thesis.

“The most immediate problem is chronic underspending. Companies are just not investing at the level they should be.”

He sees growing demand for integrated security platforms that give organizations a shared view of identities, applications, workloads, and endpoints. Rather than relying on disconnected tools, businesses can coordinate responses and more quickly revoke compromised credentials or contain threatened systems.

Preucil argues that this shift is accelerating consolidation across the industry—and that cybersecurity remains in its “early innings.”

The infrastructure challenge is particularly difficult. He estimates that up to 85% of U.S. critical infrastructure is privately owned, making national resilience dependent on businesses’ willingness to fund upgrades.

Quantum computing adds another pressure: the need to migrate systems to cryptography designed to withstand future quantum attacks.

“This is a very urgent global IT upgrade.”

A Race Neither Side Wants to Lose

Preucil acknowledges that more advanced AI faces significant obstacles, including electricity constraints and unresolved questions around alignment, control, and verification.

But he sees little reason to expect geopolitical competition to pause while those problems are addressed.

“China isn’t going to slow down. That means the US won’t slow down, either—so this will be an escalating competition.”

His conclusion is clear: cybersecurity is becoming a sustained strategic necessity, not a discretionary technology expense. As AI strengthens both attackers and defenders, the pressure to invest keeps rising.