Australian Signals Directorate warns AI-driven cyber threats will raise service disruption risks

Traders Union
All News
Regulators
AI-driven cyber threats in Australia

Highlights

Australian Signals Directorate's annual report shows a 20 percent year-on-year increase in cyber security incidents handled in the last financial year.
Emergence of advanced AI models such as Anthropic's Mythos significantly increases threat levels, prompting the ASD to establish new protocols with U.S. labs and intelligence agencies.
State and criminal actors aggressively exploiting AI are elevating risks to Australia's essential services and infrastructure, with increased urgency on modernizing legacy systems and defensive AI capabilities.

Threat outlook and agency response

As reported by ABC News, Australian Signals Directorate director-general Abigail Bradshaw says advances in frontier AI models have reshaped the cyber risk facing Australia and make further disruption to daily services unavoidable as offensive capabilities improve.

Bradshaw says disruption can take several forms, including websites being taken offline for patching, data breaches and interruptions to essential services that depend on digital networks. Her comments follow recent partial outages affecting a number of government websites, including the ASD's, after vulnerabilities were identified.

The agency is publishing its annual cyber threat report today, showing a 20 percent increase in cyber security incidents it was required to respond to in the last financial year. Bradshaw says the most significant development of the year is the emergence of frontier models such as Anthropic's Mythos, which were promoted as too dangerous for public release because of their ability to identify weaknesses in cyber defence systems.

Bradshaw also says an autonomous breach of Australian health data security by a swarm of AI agents has prompted changes in how the ASD engages with major U.S. technology groups developing advanced models. She says new protocols have been shared with the labs and with Five Eyes intelligence agencies, creating clearer expectations for ASD involvement before model testing begins.

Pressure on critical systems and regional security

Recent incidents underline how cyber vulnerabilities are extending beyond data loss into operational disruption. Two weeks ago, hackers exploited flaws in online systems to raise temperatures in supermarket fridges in France, highlighting how digital compromises can affect physical infrastructure and everyday supply chains.

The ASD has already joined international partners in warning that Chinese-aligned actors are building concealed networks of hijacked devices for espionage or offensive use. It also warns that some state actors seek to preserve access to essential services and infrastructure that could be disrupted if conflict breaks out, a risk Bradshaw says is growing as strategic tensions in the region intensify.

Bradshaw says both criminal and state-backed actors are likely to use AI more aggressively, with governments seeking to close intelligence gaps just as cyber criminals use the technology for financial gain. She says corporate and public sector operators still face urgent work to replace vulnerable legacy systems and to improve their ability to use AI as a defensive tool.

Our earlier article on the Bank of England’s push for “bare metal” recovery planning explained why regulators want banks to build independent fallback systems that can keep core services running even if primary technology is compromised. We noted that advances in AI are increasing the scale and complexity of cyber attacks, making end-to-end recovery and stronger operational resilience a priority for financial stability.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.