AI to drive Australian cyber security spend to 2026 high

Australian organisations are forecast to spend more than AUD $7.5 billion on information security in 2026, up 9.5% from 2025, according to Gartner.

The forecast reflects persistent cyber threats, wider use of AI, skills shortages, and a stronger focus on cyber resilience. Security software is expected to grow the fastest, while security services remain the largest category by total spend.

Gartner forecasts total end-user spending will rise from AUD $6.9 billion in 2025 to AUD $7.555 billion in 2026. Network security spend is expected to increase from AUD $449 million to AUD $499 million over the same period.

"Despite an uncertain business environment, cybersecurity remains one of the top technology investment priorities for organisations in Australia this year," said Richard Addiscott, a Gartner VP analyst. "Persistent threat environments and the expanding use of AI - by both defenders and attackers - remain key growth drivers, along with the continuing talent shortage in Australia and rising demands for cyber resilience."

Software growth

Security software is forecast to be the fastest-growing segment in 2026. Gartner expects spending to rise 12.3% to more than AUD $3.3 billion, from AUD $2.971 billion in 2025. The segment grew 10.9% in 2025.

Gartner links the stronger software growth to the pace of AI adoption and the added effort needed to secure AI systems. Higher investment is expected in areas such as application security, data security and privacy, and infrastructure protection.

Looking longer term, Gartner predicts more than 75% of enterprises will use AI-amplified cybersecurity products for most use cases by 2028, up from less than 25% in 2025.

This shift includes tools for AI-driven threat detection and automated incident response, designed to identify suspicious activity and speed up containment during breaches. Adoption varies, with some organisations already using these tools and others running pilots and trials.

Key drivers include growing pressure on security teams as threat activity evolves, and the use of generative AI in security workflows to help scale operations when traditional approaches cannot keep pace.

"The rapid adoption of AI-amplified security is transforming organisations, with some having already implemented these technologies and many piloting use cases," Addiscott said. "GenAI tools are being deployed for cybersecurity as teams relying on traditional measures struggle to scale and keep pace with a constantly evolving threat environment. This is driving growth in specialised AI security solutions."

Services spend

Security services remain the largest spending category in Australia in Gartner's forecast. The segment, which includes consulting, professional services and managed security services, is expected to reach more than AUD $3.7 billion in 2026, up 6.9% from AUD $3.48 billion in 2025.

Gartner attributes continued demand for services to workforce constraints. It points to rising requirements for AI-literate security personnel, adding pressure to a labour market already facing shortages in cybersecurity roles.

Managed security service providers are expected to play a larger role in filling those gaps. External providers are often used for day-to-day monitoring and response, as well as to access specialised skills that are difficult to recruit and retain.

"This growth is fueled by a growing, and increasingly critical, need for AI-literate security personnel, which is amplifying the continuing cybersecurity talent shortage in Australia," Addiscott said. "This is resulting in organisations depending more on managed security service providers (MSSPs) to fill skill gaps and enhance their security capabilities."

Network security

Network security is a smaller share of overall spending, but is forecast to grow faster in 2026 than in 2025. Gartner expects network security spending to reach AUD $499 million in 2026, up from AUD $449 million in 2025. That implies 11.1% growth in 2026, compared with 9.1% in 2025.

Overall, Gartner says Australian security and risk management leaders are balancing new technology demands with ongoing operational requirements, including securing broader use of AI within organisations and addressing the increasing use of AI by attackers.

Gartner analysts are discussing security and risk management trends at the Gartner Security & Risk Management Summit in Sydney, where Addiscott is presenting on the forecast and the factors shaping information security investment.