Local events – global impact Geopolitical instability and armed conflicts are reshaping the cyberthreat landscape, creating complex and unpredictable conditions for organizations. As global fragmentation deepens – driven by conflicts, sanctions and technological rivalry – cybersecurity is emerging as a critical extension of geopolitical competition. The large-scale power outage experienced in the Iberian Peninsula, while not in itself the result of a cyberattack, highlighted the impact a cyberattack could have on such critical national infrastructure. Ongoing instability in the wake of the war in Ukraine has coincided with a rise in hybrid attacks, using drones to target European airports and other critical infrastructure, along with the spread of disinformation, which have further destabilized the regional security landscape.8 Beyond Europe, escalating geopolitical rivalries and conflicts across the Indo-Pacific, Middle East and Africa require organizations to maintain heightened vigilance as risks intensify across regions and industries. Of particular concern to participants in focus groups for this report was the use of advanced offensive cyber capabilities by nation-state actors to hack telecommunications networks in the United States.9,10,11 The shift to a paradigm of more global confrontation – for example, by using trade policies, including tariffs and export restrictions – is reshaping alliances and technology dependencies. Political tensions are contributing to a growing fragmentation of global technology ecosystems, as countries diversify their partnerships and supply chains. Political and economic tensions are also driving countries and corporations to reconfigure supply chains, reshore manufacturing and cultivate “trusted” regional partners. The rush to establish alternative suppliers, logistics channels or data-hosting arrangements often outpaces cyber due diligence, expanding the attack surface across less-secure networks and third parties. As tariffs and policy shifts ripple through industries, cybersecurity risk management must evolve in tandem – treating trade disruptions as triggers for renewed threat modelling and vendor-risk reassessment.12In this volatile environment, cyber operations have become tools of diplomacy and influence – used to shape political outcomes and disrupt trade – further reinforcing the link between geopolitical uncertainty and organizational cyber risk exposure. Although geopolitical volatility continues to weigh on strategic decision- making, a concerning trend has emerged: reductions in cybersecurity budgets that may constrain organizational capacity to manage growing threats. Survey data shows that 12% of organizations based in North America and 13% of organizations based in Latin America and the Caribbean have reported cutting cybersecurity budgets due to geopolitical volatility. As state-sponsored attacks and espionage campaigns intensify, organizations face mounting challenges in forecasting cyber risks and aligning strategies with shifting global conditions. Participants in focus group interviews for this report warn that these pressures will persist, reinforcing the need for adaptive, resilient cyber strategies despite constrained budgets. Geopolitical tensions driving critical infrastructure vulnerabilities Geopolitical tensions particularly expose threats and vulnerabilities in the critical national infrastructure that supports society and underpins the operations of countless organizations. Sectors such as energy, water and transportation are increasingly targeted in cyber warfare campaigns, where the interconnected nature of systems amplifies the impact of disruptions. A striking illustration came in April 2025 when a Norwegian hydropower dam was hacked, opening a floodgate and releasing 500 litres of water per second for four hours, in what officials described as a deliberate act of sabotage.13 Alarmingly, 31% of the Global Cybersecurity Outlook survey participants express lack of confidence in their nation’s ability to respond effectively to major cyber incidents, which is up from 26% last year. This indicates a growing sense of uncertainty and heightened exposure. Overall confidence in national cyber response to critical infrastructure attacks FIGURE 19 How conﬁdent are you in the preparedness of the country in which you are based to respond to major cyber incidents targeting critical infrastructure? Conﬁdent Neutral Not conﬁdent20% 40% 60% 100% 80%2026 2025 0%32% 42%37% 26%32% 31% Geopolitical tensions particularly expose threats and vulnerabilities in the critical national infrastructure that supports society and underpins the operations of countless organizations. Global Cybersecurity Outlook 2026 27