A new study reveals unmanaged AI is now the #1 priority, motivating 100% of security leaders to increase their investments in AI-related initiatives.

Cycode, the leading AI-native application security platform, today released its State of Product Security for the AI Era 2026 report, revealing a stark security paradox: while AI adoption is now nearly universal, governance and visibility have failed to keep pace. The study found that 97% of organizations are already using or piloting AI coding assistants, and all confirm having AI-generated code in their codebases. Yet, despite this near-total adoption, 81% lack visibility into AI usage and 65% report increased security risk associated with AI.

The absence of oversight, confirmed by a survey of over 400 CISOs and security practitioners, has created a massive new "Shadow AI" problem, forcing a radical shift in enterprise security strategy as unmanaged AI becomes the top security concern.

Data from the report reveals a landscape that has already passed a tipping point, creating urgent new challenges:

• AI Code is Ubiquitous: All organizations confirm having AI-generated code within their codebases.
• The Role of AI is Increasing: Nearly one-third (30%) of respondents state that AI now creates the majority of code in their organizations.
• "Shadow AI" is the Blind Spot: More than four out of five (81%) lack full visibility into how and where AI is being used across the software development lifecycle (SDLC).
• Investments are Pivoting to AI Security: In response, 100% of organizations plan to invest more of their budget in AI-related security initiatives in the next 12 months.

The Productivity Boom vs. The "Shadow AI" Problem

The report shows why AI adoption is unstoppable. Participants overwhelmingly respond that AI increases productivity (78%), code quality (79%), and faster time to market (72%).

However, while AI boosts productivity, it also introduces significant risks. Despite near-universal AI adoption, most organizations (52%) lack a formal AI governance framework. This has led to a proliferation of Shadow AI, including the rapid, unmanaged spread of AI development tools, models, and coding assistants. Consequently, security leaders have identified AI-generated code vulnerabilities as both their biggest blind spot and their top security priority for the upcoming year.

“The findings make it clear: AI development is no longer a future trend; it is today’s reality. As security struggles to keep pace with this rapid adoption, the stage is set for a significant supply chain breach, with Shadow AI as the attack vector,” said Lior Levy, CEO and Co-Founder of Cycode. “It’s no longer sufficient to just find vulnerabilities in AI-generated code. The rapid spread of Shadow AI demands a strategic response: we must gain complete visibility and governance over the entire AI toolchain. This imperative is why Cycode is empowering organizations with the essential visibility, policies, and controls needed to secure AI development from prompt to production.”

Leaders Reject Tool Sprawl, Embrace Consolidation

As AI security becomes the top enterprise priority, the report reveals a definitive market trend: organizations are aggressively consolidating. Instead of funding niche tools, 97% of organizations surveyed plan to unify their application security stack in the next 12 months, and 100% are investing in AI-related initiatives. This pivot is a direct response to the complexity introduced by AI. Leaders are rejecting the "tool sprawl" of the past. Instead, they are investing in unified platforms to gain visibility, reduce noise, and manage AI-driven risk across the software supply chain.

"As enterprises accelerate their use of AI in software development, the surface area for application security risk is expanding faster than traditional controls can manage,” said Katie Norton, Research Manager at IDC. “The rise of shadow AI compounds this challenge, creating new layers of exposure that often can’t be fully seen or governed. These market dynamics observed by IDC align with the findings of Cycode’s State of Product Security in the AI Era, highlighting the need for more unified and context-driven approaches to keep security aligned with the pace of AI-driven development."

Get the Full Report

The State of Product Security in the AI Era Report provides a comprehensive data-driven look at how AI is reshaping security strategies, governance practices, and technology investments for global security and engineering leaders.

To access the full report, visit https://www.cycode.com/state-of-product-security-ai-era-2026.

About Cycode

Cycode’s AI-Native Application Security Platform unites security and development teams with actionable context from code to runtime to identify, prioritize, and fix the software risks that matter.

Powered by proprietary scanners, third-party integrations, and the Risk Intelligence Graph (RIG), Cycode delivers unified, correlated insight across the Software Factory. Its unique ability to sense, reason, and act with context in the AI-Era comes from its foundational convergence of AST, ASPM, and Software Supply Chain Security—purpose-built to secure both AI- and human-generated code.

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