Artificial intelligence is driving a sharp rise in corporate spending on data privacy and reshaping how organisations govern data, as companies seek to scale AI systems responsibly amid rising regulatory and consumer scrutiny, Cisco said on Monday.
According to Cisco’s 2026 Data and Privacy Benchmark Study, 90% of organisations surveyed said they had expanded their privacy programmes as AI adoption accelerates, while 93% said they plan to increase investment further. The study surveyed more than 5,000 IT, technology and security professionals across 12 countries, including India.
The findings suggest privacy and data governance are moving beyond compliance functions to become central to business strategy, particularly as AI systems depend on access to large volumes of high-quality data.
Cisco says spent on privacy programmes tripled
Cisco said 38% of organisations spent at least $5 million on privacy programmes in the past year, nearly triple the level reported in 2024. At the same time, 96% of respondents said strong privacy frameworks were essential for enabling innovation with AI, and 95% said privacy was critical to building customer trust in AI-powered services.
Despite growing investment, many companies continue to face governance challenges. Cisco said 65% of organisations struggle to access relevant, high-quality data efficiently, highlighting gaps in data hygiene, transparency and oversight as AI systems draw from increasingly complex and distributed datasets.
“AI is forcing a fundamental shift in the data landscape, calling for holistic governance of all data, both personal and non-personal,” said Jen Yokoyama, senior vice president for legal innovation and strategy at Cisco. She said organisations need deeper visibility into how data is structured and used so that automated decisions remain explainable.
The report also points to growing tension around cross-border data flows. While 81% of respondents reported rising demands for data localisation, 85% said such requirements increase cost, complexity and risk for organisations operating across multiple markets. More than three-quarters said localisation rules limit their ability to provide seamless, round-the-clock services globally.
Support for more harmonised international data transfer rules is growing, with 83% of respondents favouring greater alignment across jurisdictions. Cisco said confidence that locally stored data is inherently more secure has also declined compared with previous years.
“To capture the potential of AI, organisations are advocating for global consistency,” said Harvey Jang, Cisco’s vice president and chief privacy officer. He said cross-border data flows remain essential for economic growth and innovation, provided protections are maintained.
The study found that three in four organisations have established some form of AI governance body, but only 12% consider those structures mature. Cisco said the findings underline the need for clearer accountability, stronger oversight and better integration of privacy and security into AI initiatives as adoption accelerates.
India was among the markets covered in the study, as companies across sectors step up AI deployment while navigating evolving data protection and governance requirements.
