Imagine this: “employee” in 2026 is your company’s cloud dashboard. The “employee” downloads the most sensitive files and triggers a data leak that affects the entire system. But the twist is that the offender isn’t a human. It’s an AI agent that has its own credentials, permissions, and autonomy.
Rob Rachwald, Vice President at Veza, a leader in identity security, is the one who warns of such a scenario in 2026. Veza predicts that the AI-powered breach that will be the first major one will not be due to a user who made a mistake, but rather a machine identity that had too much access without supervision.
As the use of AI copilots, autonomous agents, and pipelines becomes more and more a part of everyday work in companies, identity is stealthily turning into the next digital battlefield. The issue has changed from deciding who has access to deciding what.
The Rise of AI Identities
Non-human identities (NHIs) service accounts, API keys, AI agents, and machine credentials have become the main characters in the majority of enterprises, outnumbering human users. Research by Veza points out that some companies have up to 40-50 machine identities per employee. Usually, without executing data requests or commands, these entities have no or minimal supervision, but most time, they do not even realize that they do not have oversight. Gartner predicts that by 2026, 75% of security failures will result from inadequate management of machine identities – a sharp rise from under 50% in 2023.
For what reason? Because security devices were fashioned to look after humans, rather than algorithms. Normal identity governance is based on the assumption that someone has approved access. However, what if that ‘someone’ is a machine learning model that is issuing commands in large numbers?
Misleadingly, as Rachwald points out, “just one wrongly configured token or overprivileged API key may be enough to put sensitive data at risk at a massive scale.” The biggest data breach to follow might not be perpetrated by a hacker through his keyboard but by an AI agent that is simply overusing its trust, as told.
To understand the scale and nuance of this emerging threat, here’s Rob Rachwald’s detailed insight on what 2026 may hold for AI identities:
- “The first major AI-driven NHI breach will redefine trust in automation. In 2026, a high-profile breach will trace back not to a human, but to an AI agent or machine identity with excessive, unsupervised access. As enterprises integrate AI copilots, pipelines, and autonomous agents into production systems, a single misconfigured token or overprivileged API key will expose sensitive data at scale. This will mark a turning point: identity programs will expand from human governance to AI identity governance, enforcing authentication, behavior baselines, and least-privilege policies for every algorithm that acts on behalf of the business.
- Identity remains the top threat vector — and the new battleground for nation-states. Attackers will increasingly bypass perimeter defenses, focusing on credential phishing, lateral movement via compromised identities, and abuse of excessive privileges. Nation-state actors will weaponize stolen credentials and federated tokens to infiltrate supply chains and critical infrastructure — targeting energy grids, healthcare systems, and financial networks. Identity-based attacks will remain the dominant cause of breaches globally.
- A major Copilot-driven breach exposes the risks of AI over-permissioning. 2026 will see a headline-grabbing incident where Microsoft Copilot accesses sensitive data or executes privileged actions beyond its intended scope. As organizations rush to deploy AI copilots across productivity, code, and cloud environments, many will grant broad permissions “to keep things working.” This over-permissioning, combined with implicit trust in AI automation, will lead to unauthorized data exposure or lateral movement. The incident will force enterprises to adopt granular permission controls, audit trails, and continuous monitoring for AI assistants — treating them as powerful identities, not productivity add-ons.”-
2026: The Turning Point for Cyber Trust
It is a turning point for identity-driven security, which in 2026 is marked by the intersection of three key shifts:
AI Copilots Everywhere: Enterprises are making the most of AI by introducing it in the productivity and code environments through the use of Microsoft Copilot, Google Duet AI, and the like. They authorize AI to have full access “just to keep things running.” Along with the risk is the convenience.
According to a report, which states that 69% of the breaches worldwide originate from compromised identities. As traditional firewalls become less and less important, identity is the new frontline.
Nation-State Interest: Rachwald foresees that nation-state attackers will use the weaponized stolen credentials and federated tokens to gain access to energy grids, healthcare, and finance sectors. When human or AI identities are the keys to the compromise of critical infrastructure, the latter is exposing itself to danger.
If the years 2023–2025 have been dedicated to data and network security, then 2026 will be the year of securing identities, especially those that are neither visible nor audible.
The Hidden Dangers of AI Over-Permissioning
Have you ever thought about giving your intern the keys to the company database? It’s hard to believe that you would do that, isn’t it? However, that’s exactly how some companies treat their AI systems.
It is very possible that a breach can occur due to the wrong use of a Copilot, which is a maliciously granted admin rights or unrestricted file access case. AI systems do not “think” about the context; they just follow the orders. Also, since they operate automatically, they can do a lot without anyone realizing that until it is too late.
Even scarier, compromised AI identities can go in different directions – pretending to be trusted software, performing privileged actions, or even spreading malware. They do not lose energy, memory, and they are definitely not asking for holidays.
Why Governance Needs to Change
Identity governance was once just about managing passwords and logins. Currently, it has to include management of algorithms. Rachwald describes this subsequent stage as AI Identity Governance – this means the implementation of authentication, behavioral baselines, and least-privilege policies for every algorithm that represents the company.
That demands:
- The level of transparency that will enable us to know the identities of people and AI, as well as the access rights of these identities.
- Granular permissioning to give an AI system only the necessary part of a task.
- Non-stop watching for irregularities in the behavior of agents.
- Records of every move an AI made – just like there are human logs.
Veza’s Access Platform and similar services are turning local permission visualization and control into a seamless process for enterprises, bridging the gap that exists between automation and accountability.
What Smart Organizations Should Do Now
Rachwald’s warning is not only a theoretical idea that serves as a blueprint for a successful proactive defense. The following are the ways through which enterprises can be ready even before the first AI identity breach is reported in the media:
- Take a thorough look at all identities. Register every human user, service account, API key, and AI agent. Listing them is the prerequisite for securing them.
- Use the principle of least privilege for access. Only allow AI agents to perform those tasks for which they have the necessary permission – and keep track of them regularly.
- Set up behavioral standards. Employ the help of data analytics tools in recognizing the situations where AI agents perform unusually.
- Keep an eye on token usage and periodically change them. Several breaches have been initiated from the point of lost or forgotten keys. Therefore, you should be taking the steps to deactivate and change login credentials on a regular basis.
- Consider AI copilots as high-level users. They are not “add-ons,” rather, they are identities that can have a major impact.
The same can be said about self-driving cars, though you count on the car to do the steering, you still need to keep your hands close to the wheel.
Why It Matters to Everyone
Even if you are not in the field of cybersecurity, such changes will still have an impact on you personally. Identity breaches that lead to data exposure are the main reasons that trust in automation is diminishing.
To a C-suite, this represents a risk to the brand. For engineers, it disrupts working processes. Ordinary employees face a potential leak of their private data. However, there is also a positive side to things: companies that take the security of AI identities seriously from the very beginning will be the ones to lead the way in innovation. They will have the advantage of moving at a faster pace, being compliant with the new regulations, and maintaining trust when others are in a state of panic.
Cybersecurity is not about fear anymore; rather, it is about looking ahead.
Conclusion
In the year 2026, the term “zero trust” will mean something completely different. The next biggest security story won’t be about a hacker wearing a hoodie – rather, it will be an AI agent with too many permissions acting without any human oversight.
The forecast made by Rob Rachwald can be seen as a call for attention: identity is the new perimeter, and AI identities are its weakest point.
Without the proper moves from the side of enterprises, the first major AI identity breach will be the one to change the public view on automation and trust completely. However, if they take the step right now – by creating protective measures, implementing least privilege, and treating every algorithm as a user – not only will they be able to protect their systems, but also secure their future.
As a matter of fact, the best way of getting ready for an AI-caused threat… is making sure that your AI is aware of its limits.
FAQs
1. What is an AI identity?
Any digital credential, token, or service account that represents a non-human entity – e.g., an AI agent, Copilot, or API key – that has access to enterprise systems is called an AI identity.
2. Why are AI identities a new threat in 2026?
Because AI agents are rapidly increasing in number and are mostly working autonomously, they have broad permissions and are under very limited supervision. This situation results in completely new attack surfaces.
3. How can over-permissioning cause breaches?
Overextending AI tools with admin-level or unrestricted access can lead to unauthorized data exposure should the credentials be misused or compromised without the knowledge of the users.
4. What does AI Identity Governance mean?
It is the step that involves securing and overseeing machine and AI identities through authentication, behavior monitoring, and least-privilege practices.
5. How can organizations be ready?
They should first ID all the people and machines, limit permissions to the minimum necessary, and keep track of tokens by auditing them regularly. On top of that, they can use Veza’s Access Platform. As a monitoring and management tool for access control and anomaly recognition.
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