Datadog flags fourfold rise in cloud vulnerabilities

Datadog has published research showing a fourfold rise in serious vulnerabilities in cloud services. The findings also point to widespread use of long-lived AI access keys.

Its State of Cloud Security 2026 report found that the median number of high or critical vulnerabilities in the cloud services it analysed rose from four in February 2026 to about 16 in November. The study was based on thousands of organisations using Datadog's infrastructure monitoring, logging and cloud security products, drawing on customer data from around the world.

The figures add to concerns about how exposed cloud applications are becoming as software supply chains grow more complex and companies connect more services through application programming interfaces and machine identities. The report argues that the key issue is no longer only whether an application can be compromised, but how far an attacker could move after gaining access.

AI keys

More than one in five organisations analysed uses cloud AI services, according to the report. Among those using Google Gemini, nearly half rely on long-lived Gemini API keys, while 17 per cent of organisations using Amazon Bedrock use long-lived Bedrock API keys.

Those credentials can remain valid until revoked, meaning a stolen key may continue to provide access long after an initial breach. This is becoming more relevant as businesses build AI tools into internal systems and customer-facing applications.

Andrew Krug, Head of Security Advocacy at Datadog, warned that AI access keys can become a practical route for attackers. "Attackers don't need to use their own AI model if they can steal the key used to access yours," he said.

Datadog's Security Labs team recently identified tools designed to test whether stolen Amazon Web Services credentials could access Amazon Bedrock. Researchers also observed similar probing activity in 12 organisations' cloud environments over a 30-day period.

Supply chain risk

The report also points to software package dependencies as a growing source of exposure. Cloud workloads depend on 149 software packages on average, and more than half are indirect dependencies introduced through other packages.

At the same time, 60 per cent of organisations run cloud applications using a package version released less than 24 hours earlier. Across all cloud applications analysed, 21 per cent use a version that new.

That does not mean recently released packages are unsafe, but it does show how quickly a compromised component could spread into production systems. The report cites the Shai-Hulud 2.0 malware as an example, noting that it searched infected systems for cloud credentials.

Datadog presents this as part of a wider shift in security risk, in which application flaws, software supply chain issues and machine credentials intersect. If attackers gain access through vulnerable software or a poisoned package, they may then use inherited permissions and static keys to move across systems.

Defensive measures

There are some signs that organisations are narrowing what attackers can reach after a breach. Among organisations using AWS, 55 per cent have adopted data perimeters, up from 40 per cent in 2025.

Emilio Escobar, Chief Information Security Officer at Datadog, said organisations need to combine remediation of known flaws with tighter limits on access. "As serious flaws multiply, the question is how far an attacker can get through one compromised application," he said. "Teams need to fix those flaws and limit the damage if an application is compromised. Temporary credentials and data perimeters can restrict an attacker's access, while a shared view of applications, identities and infrastructure helps security and engineering contain an attack before it spreads. In the AI era, security becomes an observability problem: you can't stop a system-wide attack without seeing the whole system."

Temporary credentials should replace static keys where possible, particularly in AI deployments where service-to-service access is often granted early in development and then left in place. The report suggests convenience in deployment is still outweighing risk reduction in many environments.

Datadog's regional view indicates the pattern is not confined to one market. Yadi Narayana, Field CTO APJ at Datadog, said the company was seeing similar issues in Australia and New Zealand. "The report broadly reflects what Datadog sees across Australia and New Zealand. Many organisations understand the risk, but long-lived credentials often remain hidden in older applications and integrations because teams fear disrupting critical services. Boards should treat software supply chain risk as a business resilience issue, not simply a technical problem. The priority is to identify every credential, understand what it can access, replace static keys where possible and monitor unusual activity across the full environment," he said.