The Rise of AI-Powered Cyber Threats

The growth and power of AI is causing a large shift in many common practices, everything from healthcare processes to marketing plans. AI isn’t just reshaping marketing and medicine—it’s reinventing how cybercriminals launch attacks. From deepfake-powered scams to automated phishing at scale, AI is giving hackers a serious edge. And as the tech advances, so does the speed, precision, and damage of these attacks. Here’s what every SMB needs to know—and do—about the rise of AI-powered cyber threats. 

How Do AI-Powered Cyberattacks Work 

While AI can be a useful tool, it can also be weaponized against unsuspecting victims. Cybercriminals can use AI to automate, increase, and greatly enhance their already existing attacks. AI can be used to quickly find vulnerabilities and blind spots in your cybersecurity protocols. This can put your company at great risk.  

AI is lowering the barrier to cybercrime. Tools like WormGPT  and FraudGPT—lack-hat variants of generative AI—are being sold on the dark web to help cybercriminals write phishing emails, generate malware, and launch business email compromise (BEC) scams. According to a report by SlashNext, WormGPT was trained on malware-related data and can produce “strategically cunning” phishing messages with no ethical guardrails​.

FraudGPT, similarly, is marketed as a tool that can create undetectable malware, phishing pages, and scam scripts—even for users with little technical skill​. These AI tools let attackers run convincing campaigns at scale, reducing cost, effort, and detection risk. As Cyberattacks become increasingly AI-driven, the frequency and complexity of these threats will only continue to grow.  

Types of AI-Powered Attacks 

There are a few types of AI-powered attacks you should be aware of. These include: 

AI Social Engineering Attacks 

These types of attacks aim to mimic human behavior to lure a victim into a false sense of security and trick them into ‘willingly’ giving away their information. Examples of this include: 

• Creating fake login pages for popular websites 

• Impersonating a company’s customer service 

• Creating deepfakes  

All these examples can use AI to make the hacking process faster. Creating deepfakes is easier than ever now that AI software can quickly create images, videos, and even audio. As AI continues to evolve, AI-powered social engineering attacks are becoming more and more frequent. The content made with AI is only getting better and becoming more believable. Voice deepfakes are especially a danger. All an AI bot needs is a sample of a voice from an audio or video, and it can replicate and say whatever a hacker needs.  

Hackers will often begin by choosing a company to target and learn everything they can about it and start to target employees as a means to gain access. They will use the information they collect to create a fake persona (using AI to create the visuals) and create a believable scenario allowing for an employee or multiple employees to give them access to their accounts and systems. After this, hackers can take what they need to potentially hold for ransom. 

AI Phishing Attacks 

Perhaps the most common tactic of hackers is phishing. With AI, it is now more dangerous than ever. By using AI, cybercriminals can quickly create highly customized and realistic emails, texts, social media accounts, and more. Phishing attacks typically include a link or instructions to login somewhere to gain access to credentials and information. AI can also automate the communications process between attackers and their victims. This leads to hackers being able to attempt to steal information from multiple victims at once with minimal effort. About 78% of people will open an AI-generated phishing email, and about 21% are likely to click on the malicious links inside.  

AI Ransomware Attacks 

AI-powered ransomware attacks are also increasing. Ransomware attacks involve holding certain types of information hostage until a person or company pays up. AI can be used to speed up the research for these attacks or even encrypt the stolen data. AI can also be utilized to find vulnerabilities in a system. Some more experienced hackers are now using AI to create advanced ransomware and are selling it to less experienced hackers to execute. AI can quickly create any code needed for protecting or hacking so it can be used as both a blessing and a danger.  

Adversarial Attacks on AI Models 

As more companies adopt AI-driven tools for spam filtering, fraud detection, and cybersecurity, attackers are now targeting the AI models themselves. These adversarial attacks involve feeding the model intentionally manipulated inputs—called adversarial examples—that cause it to make incorrect predictions or classifications. This means that Cybercriminals are now using AI to create fake videos, voices, or images that are incredibly convincing. These deepfakes can impersonate your CEO, a vendor, or even a customer, tricking employees into sharing sensitive information or approving fake invoices. All it takes is one audio clip or photo for AI to clone someone’s identity convincingly. A case study demonstrated how adversarial examples can successfully deceive Windows malware detection systems, highlighting the practical risks of such attacks. 

Synthetic Identity Fraud 

Hackers are using AI to build completely fake identities that look and sound real. They use fake names, photos, documents, and even job titles to apply for business loans, get access to vendor portals, or sneak into your systems. This is called synthetic identity fraud, and it’s one of the fastest-growing forms of financial crime in the U.S. According to the Federal Reserve, synthetic identity fraud is the fastest-growing type of financial crime in the United States, accounting for billions in losses annually. 

AI-Augmented Bot Attacks 

Traditional automated attacks used to be easy to spot. But with AI, bots can now act like real people online—visiting your website, logging in slowly, and even solving security checks like captchas. These AI-powered bots are designed to guess passwords or test stolen login info without raising red flags. That means even your basic login system could be quietly under attack, without you knowing it. These AI-augmented bots make large-scale automated attacks more effective and more difficult to detect with traditional defenses. 

How to Protect Against AI Attacks 

As AI is constantly evolving, so should protection strategies. AI can also be used for good and can help keep your business protected. Here are a few items to implement to ensure your data stays protected: 

Regular Cybersecurity Checkups (Cybersecurity Assessments) 

Think of cybersecurity like a health checkup—your systems need regular scans to spot new problems early. A cybersecurity assessment should not only be done at the beginning of your services. Don’t just “set it and forget it.” Use tools that scan for weaknesses weekly or monthly, not just once when you install them. Recurring assessments should be conducted in order to detect and identify any potential issues and fix them before an AI-powered attack happens. Ensure that you utilize a reliable cybersecurity platform to deploy your assessments and offer real-time analysis. AI can help to automate these assessments and send automatic reports daily, weekly, monthly, etc. 

Employee Security Awareness Training 

Employees are often the first line of defense—ensuring that your employees are trained to spot common hacking tactics is one of the best ways to keep private data safe. Awareness training can be provided through your company’s dedicated IT/cybersecurity department or through an external cybersecurity service. Either way, it is essential that your employees are updated on all and any cyberthreats and what they should look out for/avoid. Give your team short, regular training on how to spot fake emails, strange requests, or unexpected pop-ups. Even a few sessions a year can drastically reduce the chances of someone clicking on a dangerous link. 

Secure Your AI Tools and Chatbots 

If your business uses AI—like chatbots, virtual assistants, or automated decision-making tools—they also need protection. These systems can be targeted by hackers to steal customer data, send fake messages, or learn how your business operates. 

For example, a compromised chatbot might give away sensitive information or be used to impersonate your business. Ensure any AI tools you use are kept up to date, don’t store unnecessary personal data, and follow strict access controls (only certain people should be able to change or access them). 

Use AI to Defend Against AI 

The best way to fight AI-powered threats is often with AI-powered defense. Modern security tools use artificial intelligence to detect unusual behavior—like someone pretending to be a manager, logging in at strange hours, or downloading large amounts of data. 

These tools learn what’s “normal” for your business and flag activity that seems off. That means you can catch attacks earlier, before damage is done. If you’re not using AI in your security stack yet, now’s the time to explore it. According to IBM’s X-Force Threat Intelligence Index organizations using AI-based security tools can reduce breach containment time by up to 74 days. 

Threat Detection and Response 

Utilizing software such as Endpoint Detection and Response (EDR) can help provide early alerts of any potential attacks. EDR can monitor multiple types of devices including laptops, tablets, smartphones, and more. EDR can also be automated with AI and can detect issues that bypasses regular antivirus software.  

Have a “What-If” Plan Ready (Incident Response Plan) 

If an attack happens, you need a clear, step-by-step response plan. Who do you call? How do you recover your data? How do you tell customers if their info was exposed? This is called an incident response plan (IRP). IRPs are essential to have. An IRP carefully lists the steps needed to deal with a breach or attack. You must include dedicated personnel, communication channels, and a plan to restore data and operations quickly. Do not develop your plan amid an attack; ensure it is ready well before one may happen. Even a basic plan can help your business bounce back faster. 

Protect Your Business with Castile Security  

With AI-powered cyber threats on the rise, having a dedicated cybersecurity team behind you is essential. The more powerful AI grows, the more potential there is for your business to experience a devastating attack. Castile Security can help protect your business and provide training to your employees. Schedule a call today!