AI-related data breaches linked to cross-border misuse of generative AI ( GenAI ) are expected to exceed 40 % by 2027, according to a from Gartner. The research firm claims that the fast adoption of GenAI technology has led to more regulation and security issues, particularly in terms of data localization requirements. The dangers associated with cross-border data transfers are growing, according to the US-based technical analysis and consulting company, because businesses rely on centralized processing power to support AI-driven operations.
” Unexpected cross-border data transfers usually occur due to insufficient supervision, especially when GenAI is integrated in existing products without obvious explanations or news”, said Gartner’s VP scientist Joerg Fritsch. Organizations are beginning to notice changes to the content produced by people using GenAI resources. These devices can be used for approved business applications, but they pose safety risks if delicate prompts are sent to AI tools and APIs hosted in unfamiliar locations.
Gartner points to the lack of international AI governance standards as a significant contributor to security flaws and compliance issues. Enterprises operating in multiple jurisdictions must create region-specific AI strategies to comply with varying regulations, which add to the operational complexity and limit AI scalability. Innovation will be slowed and the will be impacted by market fragmentation brought on by various regulatory requirements.
By 2027, it is anticipated that AI governance will be a required component of all international sovereign AI laws. Gartner advises businesses to strengthen their governance systems in order to reduce the risks posed by AI-driven data breaches before regulatory enforcement. Organizations deploying GenAI technologies are expected to become essential for setting up oversight mechanisms to ensure compliance with AI laws across different regions.
strengthening the security and governance of AI data
To address the risks posed by cross-border AI misuse, Gartner recommends extending data governance policies to include AI-specific risk assessments. To stay current with changing laws, businesses are encouraged to implement stricter data lineage tracking and cross-border transfer impact assessments.
Security measures such as encryption, anonymisation, and the use of Trusted Execution Environments are also advised to protect AI-generated data. When information is transferred between regions, techniques like differential privacy can increase data security even more.
Additionally, organisations are expected to invest in trust, risk, and security management ( TRiSM) solutions designed for AI technologies. These solutions encompass AI governance frameworks, prompt filtering, redaction tools, and synthetic data generation. By 2026, according to Gartner, businesses that use AI TRiSM controls will significantly reduce their exposure to untrue or inaccurate information, improving AI reliability in decision-making processes.
Recent studies that highlight the financial and operational effects of data breaches reinforce the need for stronger AI data governance measures. In 2024, the global average cost of a data breach, , rose to$ 4.88m, reflecting a 10 % increase from the previous year. In contrast to those that don’t implement security AI and automation, according to IBM, cost savings of$ 2.22 million were reported by businesses that implemented them.
Regional studies also point out the growing concern over AI-driven security threats. In a late 2024 survey conducted by Cloudflare and focused on the Asia-Pacific region, 41 % of businesses reported a data breach in less than ten incidents, compared to 41 % of those in the same year. The study identified Construction and Real Estate ( 56 % ), Travel and Tourism ( 51 % ), and Financial Services ( 51 % ) as the most affected industries. Additionally, 87 % of cybersecurity leaders expressed concern that AI is making data breaches more sophisticated and difficult, which underscores the need for more advanced security measures to counteract changing threats.
