The interconnected nature of modern cybersecurity means that weaknesses in national defense systems inevitably cascade into the commercial sector, creating new vulnerabilities for organizations of all sizes. In this article, we explore how the breakdown in U.S. cyber defenses affects the private sector and outline the steps you can take to protect yourself.
The Shifting U.S. Cybersecurity Landscape
Recent developments in the United States have led to a significant weakening of the national cybersecurity apparatus.
One of the most notable shifts is the move toward decentralization of cybersecurity responsibilities. In March 2025, the administration signed an executive order directing more cybersecurity responsibilities to state and local governments. “Federal policy must rightly recognize that preparedness is most effectively owned and managed at the State, local, and even individual levels,” states the executive order.
As a result, the Department of Homeland Security cut approximately $10 million in federal funding to the Multi-State Information Sharing and Analysis Center, which previously served as an essential hub for sharing threat intelligence among state-level cyber agencies and staff. Similar reductions affected the Elections Infrastructure Information Sharing and Analysis Center, which supported cooperation between election officials and voting system manufacturers.
Several key federal cybersecurity bodies have been significantly altered or disbanded entirely. The Cyber Safety Review Board (CSRB), which investigated major cybersecurity incidents similar to how transportation safety boards investigate accidents, was dissolved early in 2025. For example, this board had been conducting an investigation into the “Salt Typhoon” hacking campaign, described as the “worst telecommunications hack” in U.S. history, according to The Conversation.
The Cybersecurity and Infrastructure Security Agency (CISA), the federal agency charged with protecting critical infrastructure, has also experienced changes with numerous staff departures. Several cybersecurity experts who previously worked on election security were placed on administrative leave, reports Associated Press.
While domestic cybersecurity infrastructure undergoes significant changes, nation-state threat actors have been demonstrating increasingly sophisticated capabilities and bolder tactics. Former CISA director Jen Easterly warned that hackers linked to China “have burrowed deep into the digital plumbing of telecom, water, power and other key sectors across the U.S.” She emphasized that “what we were able to find at CISA was just the tip of the iceberg.”
What Weaker National Cyber Defenses Mean for Your Organization
The simultaneous reduction in federal cybersecurity capabilities and escalation in foreign threats creates a perfect storm for U.S. organizations, especially those in critical sectors like healthcare, energy, and financial services. Here are some of the most important challenges they face as a result:
- Information vacuum: With funding cuts to information-sharing bodies like the MS-ISAC and the dissolution of investigative groups like the CSRB, businesses may find it harder to access timely, coordinated threat intelligence and actionable post-incident analysis derived from major national events and cybersecurity trends.
- Business continuity: The shift towards state and local responsibility for critical infrastructure protection, while empowering local control, could create inconsistencies in defense capabilities across different regions. Businesses relying on utilities, transportation, or other essential services—or those within the supply chains of these sectors—may face heightened risks if partners operate in areas with fewer cybersecurity resources.
- Emboldened cyber adversaries: A perceived weakening or fragmentation of national cyber defenses can embolden nation-state actors and sophisticated cybercriminal groups. Even when attacks primarily target government or critical infrastructure, the malware or techniques used can inadvertently spread, impacting commercial businesses and non-profit organizations alike, as seen in past incidents like NotPetya.
- Stricter compliance and regulation: In sectors like healthcare and finance, authorities are raising the bar on cybersecurity requirements to compensate for broader threats. After a bruising year of hospital ransomware attacks and data leaks, U.S. regulators and lawmakers are now proposing stricter rules to protect healthcare systems from cyberattacks. Banks and utilities similarly face new guidelines for risk reporting and resilience. This means more compliance hoops to jump through—from meeting industry-specific security standards to reporting incidents within tight deadlines.
- Tightening insurance policy terms: Insurance carriers, worried about massive cyber catastrophes, are tightening policy terms and hiking premiums. Notably, many cyber policies now include “war exclusion” clauses. If an attack is deemed a state-sponsored act of war, insurers may deny coverage. Lloyd’s of London has gone so far as to mandate that its insurer syndicates exclude major nation-backed attacks from coverage going forward.
Organizations must recognize these challenges and accept the fact that they can no longer rely on the federal government to provide the same level of cybersecurity support and guidance they once did. Instead, they must take decisive action to strengthen their own cybersecurity posture.
Take Control by Strengthening Your Organization’s Defense Posture
Start by fortifying all endpoints (computers, mobile devices, servers) and network entry points so that every device is protected by not just a firewall and antivirus software but also an Endpoint Detection and Response (EDR) solution capable of identifying threats that might otherwise go unnoticed. By layering these defenses (firewalls, antivirus, EDR, etc.), you create overlapping shields so that if one measure falters, another can block the threat.
Because compromised credentials are a common attack vector, it’s paramount to lock down access to your systems. Implement multi-factor authentication (MFA) on all user accounts and important systems—requiring a second factor (like a phone app code or hardware token) dramatically reduces the risk of unauthorized access. It’s also wise to adopt a principle of least privilege: give employees access only to the data and systems necessary for their roles, and no more. Don’t forget to regularly review user accounts and permissions, revoking access for departing staff or stale accounts.
The reality is that even the best technology and policies won’t stop every attack; the people in your organization play a pivotal role in cybersecurity. Building a security-aware culture through ongoing security awareness training is therefore vital. Train employees to recognize phishing emails, social engineering tricks, and other common attack tactics, so they become an active line of defense rather than a weak link. Executive leadership should also reinforce this culture by treating cybersecurity as a company-wide responsibility. When everyone from the CEO down to each employee prioritizes security, the human element of defense becomes a powerful asset.
Finally, recognize that you don’t have to strengthen your organization’s cyber defenses alone. Partnering with a reputable managed cybersecurity services provider can be an effective way to bolster your defense in a cost-efficient manner. MSPs offer specialized expertise and around-the-clock monitoring that would be difficult for a small in-house team to match. They can also assist with conducting the security assessments and training mentioned above, bringing experience from defending other clients in your industry.
Conclusion
The cybersecurity landscape is undergoing a profound transformation. As federal protections recede and nation-state threats intensify, businesses face unprecedented challenges in keeping their digital assets secure. To overcome them, the private sector must take the protection of its own networks, data, and business operations to the next level by, among other things, enforcing strong access controls, fostering a security-aware workplace culture, and partnering with experts who can deliver around-the-clock monitoring and incident response.
If you’re ready to take the next step in fortifying your organization’s cyber defenses, schedule a meeting with us at OSIbeyond.