83% of SMBs Say AI Increased Cyber Risk – Are You One of Them?

For years, small and midsized businesses (SMBs) believed cybercriminals were focused on Fortune 500 companies. After all, why would hackers waste time on a 50-person manufacturer, a regional law firm, or a local medical practice?

That illusion is gone. SMBs are now prime targets—and artificial intelligence has accelerated the threat. A recent survey by ConnectWise found that 83% of SMBs believe AI has already raised the cybersecurity threat level for their organizations. Yet, more than half admitted they don’t have clear policies or defenses in place to address these risks (ConnectWise SMB Cybersecurity Report).

AI has lowered the cost of launching sophisticated attacks, given criminals new ways to mimic trust, and made detection harder than ever. According to Mastering AI For Business Success, the cyber risks businesses face today didn’t even exist a few years ago. Worse still, the attackers wielding AI are innovating faster than most companies can defend themselves.

Let’s break down five of the most urgent AI-fueled threats SMB leaders need to understand—and what it means for your organization.

1. Social Engineering: Trust Is the Weakest Link

Hackers have always targeted people. But with AI, their tactics have evolved from clumsy scams to precision strikes. Phishing emails are now tailored with personal details scraped from social media. Generative AI can imitate a supplier’s invoice style. Voice synthesis can replicate an executive’s tone and cadence during a live phone call.

The result? Employees who once rolled their eyes at “Nigerian prince” scams are now facing emails, texts, and calls that appear indistinguishably real. One click, one mistaken wire transfer, or one shared password can derail operations overnight.

Business impact: Beyond financial theft, social engineering attacks often serve as the “front door” for larger breaches. A single compromised account can provide access to client data, intellectual property, or financial systems.

2. Ransomware: From Disruption to Extortion at Scale

Ransomware isn’t new, but AI has supercharged it. Attackers can now scan for vulnerabilities across millions of devices, choose optimal entry points, and deploy malware that adapts in real time to avoid detection. Once inside, AI-driven ransomware spreads silently, encrypting files and backups before anyone notices.

And the stakes have shifted. It’s no longer just about locking data until a ransom is paid. Criminal groups now steal data before encryption, threatening to release sensitive information publicly if demands aren’t met. For regulated industries, that means a ransomware attack can double as a compliance nightmare.

Business impact: Downtime can cripple SMBs, but the reputational fallout—and potential lawsuits—are often worse. Many businesses never fully recover.

3. Passwords: Still the Weakest Link in the Chain

Despite advances in security, password hygiene remains abysmal. Employees reuse credentials across personal and business accounts, store them in spreadsheets, or fall prey to phishing links that capture logins.

AI makes this problem exponentially worse. Machine learning algorithms can analyze common patterns, crack weak passwords in seconds, and attempt brute-force logins across thousands of sites simultaneously. For SMBs, one compromised credential can open the door to payroll systems, vendor portals, or customer databases.

Business impact: A single compromised password can be the entry point for data theft, fraudulent transactions, or full-scale account takeovers.

4. Unpatched Software: Millions of Doors Left Open

Updating software has always been a security best practice, but AI has turned unpatched systems into sitting ducks. Cybercriminals can now scan the internet continuously, flagging devices and applications that haven’t applied the latest security updates.

These aren’t hypothetical risks—they’re already reshaping the small business landscape. According to ConnectWise, 83% of SMBs say AI has increased cyber risk in their organization, but too few have updated their defenses accordingly. That gap is exactly what attackers are exploiting.

Think of it this way: if a patch closes a hole in your roof, AI allows attackers to identify every unpatched roof in the neighborhood in minutes. If your systems lag behind, you’re automatically on their target list.

Business impact: Breaches through unpatched software often serve as springboards into broader networks. What starts as a “minor” entry point can escalate into full network compromise.

5. Insider Threats: Harder to Spot, Easier to Exploit

Not all risks come from the outside. Employees, contractors, or even trusted partners can become security gaps—sometimes intentionally, often accidentally. With AI, those gaps become easier to exploit. Tools can detect which accounts have the highest privileges, scan for unusual access behaviors, or identify when employees are storing sensitive data in unsecured locations.

This isn’t just about disgruntled employees. It’s about good people making small mistakes that AI-driven attackers can spot faster than your IT team.

Business impact: Insider threats are uniquely dangerous because they bypass traditional defenses. If an attacker gains access through a trusted insider account, detection becomes exponentially harder.

The New Reality: AI Is a Weapon on Both Sides

AI isn’t just a tool for innovation—it’s also a weapon for exploitation. For SMB leaders, this means the security landscape is no longer static. Threats are evolving daily, and attackers no longer need massive budgets or teams of experts to cause real harm.

The good news? AI can also be used to defend. Advanced detection systems, automated monitoring, and smart backup strategies give smaller companies enterprise-grade protection—when paired with the right policies and a proactive IT partner.

A Practical Playbook for SMB Leaders

This is where Randy Hall’s Mastering AI For Business Success becomes invaluable. Drawing on decades of frontline cybersecurity experience, Hall explains how AI is reshaping the risk landscape and offers a framework for using it responsibly—without falling into the traps bad actors are exploiting.

Best of all: qualified SMB leaders can request a complimentary physical copy of the book. This isn’t a summary or a PDF. It’s a complete edition, shipped directly to business owners who need it most.

Inside, you’ll learn:

• How AI-fueled threats are evolving faster than traditional defenses.

• The biggest mistakes SMBs make when adopting AI tools.

• How to design an adoption strategy rooted in both opportunity and protection.

Request your free copy today and equip your business with the clarity and confidence to stay ahead of AI-driven threats.