Microsoft Detects Russian, Chinese AI Hackers: Is It Time To Add Cybersecurity To Your Portfolio?

The pressing need to combat a new breed of cybercriminals using artificial intelligence to trick their way into government and corporate records is likely to be the driving force behind AI deployment in the coming months.

This was underlined on Wednesday after Microsoft Corporation MSFT said in a report that it had detected hacking groups with affiliations to institutions such as Russian military intelligence, Iran’s Revolutionary Guard and Chinese and North Korean government agencies using OpenAI‘s large language model (LLM) generative AI (GenAI) tools.

AI-powered cybersecurity network companies are already among the biggest gainers on the S&P 500 this year. In a report on Monday, Benzinga identified some of the best performing firms, including Palo Alto Networks PANW and Fortinet FTNT.

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Growing AI-Backed Security Threats

What are the growing security problems companies and government agencies now face? Data, particularly, is at a premium, as it can be monetized by cyber criminals.

Also, however, planting misinformation and deepfakes can influence public opinion — particularly if targeted at social media. This is becoming ever more important in 2024 as nearly a third of the world’s population votes in national elections this year.

“The world faces a polarized geopolitical order, multiple armed conflicts, both skepticism and fervor about the implications of future technologies, and global economic uncertainty,” said Jeremy Jurgens, author of the World Economic Forum’s 2024 report on cybersecurity.

He added: “Amid this complex landscape, the cybersecurity economy grew exponentially faster than the overall global economy, and outpaced growth in the tech sector.”

What Happened At Microsoft?

Microsoft said on Wednesday that the Russia-affiliated hackers were using LLM models to research satellite and radar technologies “that may pertain to conventional military operations in Ukraine, while the North Koreans were looking to generate content that could be used in spear-phishing campaigns.”

The report made no mention of the volume of attacks, and unveiled the findings as it announced a blanket ban on state-backed hacking groups using its products.

Thus, companies and agencies will likely be seeking to beef up their cybersecurity in response to the raised threats identified by Microsoft and OpenAI.

“Applying and using LLMs in a security operations center is one way to adopt emerging technology into existing foundational cybersecurity. LLMs can be used as a way of automating or assisting an analyst to threat-hunt with more accuracy,” said Jurgens.

Fight AI Threats With AI-Powered Cybersecurity

Among the companies outside of the S&P 500 that are implementing AI technology into their cybersecurity offerings is Zscaler Inc ZS. Its AI-Zero Trust Exchange platform is used by clients like United Airlines, which has successfully identified and thwarted emerging threats through this technology.

Zscaler has enjoyed a good run over the past year, more than doubling its share price from around $110 to around $240.

CrowdStrike CRWD has performed even better, tripling its share price from $105 at the beginning of 2023 to its current $329.

The company boasts over 23,000 customers worldwide and named a leader in GenAI cybersecurity in 2023 by industry analyst Gartner.

Cloudfare Inc NET has doubled its share price since the start of 2023 from $45 to $101, while SentinelOne S has also doubled in price from $14.50 to $31 over the same period of time.

Among the exchange traded funds that cover the cybersecurity sector, the First Trust Nasdaq Cybersecurity ETF CIBR, which counts all the above stocks in its holdings, is up 50% since the start of 2023, and the iShares Cybersecurity and Tech ETF IHAK, which also holds the above companies, is up 48% over the same period.

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