This white paper presents findings from a security analysis of the AI ecosystem, examining 2,595 VS Code extensions, 147 Model Context Protocol (MCP) server implementations, and 12 agent frameworks.

The research identified vulnerabilities across multiple deployment vectors, with 275 security issues discovered across analyzed extensions (10.6% occurrence rate), 5,933 AI artifacts extracted that contain prompt injection vectors, and MCP servers showing exploitable command injection in 78% of tested instances. Using Mirror Security's DiscoveR framework, a security assessment tool for AI systems, the findings indicate that current AI infrastructure operates with security assumptions that adversaries can exploit, with attack success rates exceeding 70% for chained vulnerabilities.

Our paper also includes a survey conducted by Mirror Security of 368 AI Engineers, developers and decision makers across various sectors. While organizations express confidence in their AI security and adoption, examination reveals gaps in security practices. This disparity highlights an area of risk within the AI ecosystem. 87% of organizations lack proper data encryption for AI, indicating a vulnerability in data protection for AI systems.

While organizations express high confidence in their AI security and widespread adoption, a closer look reveals significant gaps in fundamental security practices. This disparity highlights a critical area of risk within the evolving AI ecosystem.

Traditional application security models fail when applied to AI systems due to fundamental architectural differences. Unlike conventional software with predictable inputs and outputs, AI systems introduce probabilistic behaviors & opaque decision-making processes. In this study we have applied the threat models covering following attack vectors.

These five threat categories don't operate in isolation but form an interconnected web of vulnerabilities. Each successful attack in one category increases the likelihood and impact of attacks in others, creating a cascading failure scenario that can compromise entire AI infrastructures within hours.

Our analysis revealed interconnected vulnerabilities across three primary attack surfaces:

Histogram of framework vulnerabilities and attack success rates across different agent types. OpenAI Agents show the highest vulnerability rate (89%) while CrewAI has the highest attack success rate (83%).

Red Teaming of 12 agent frameworks revealed systemic security failures:

Our research has revealed a fundamental architectural flaw common across all attack vectors. Every successful exploit leveraged the same critical weakness: data exposure at processing points.

The fundamental challenge of securing AI systems while maintaining their utility can be addressed through a paradigm shift in data processing. Our research demonstrates that Fully Homomorphic Encryption (FHE) serves as the cornerstone of this solution, enabling computation on encrypted data without requiring decryption.

Homomorphic Encryption is a cryptographic technique that allows mathematical operations to be performed directly on encrypted data, ensuring end-to-end confidentiality, even as AI systems process sensitive information. When you decrypt the result, it's identical to what you would have gotten by performing the same operations on unencrypted data. This capability allows AI systems process sensitive information without ever seeing the actual data. Whether analysing medical records, financial transactions, or personal communications, the AI performs all computations on encrypted values while producing encrypted results that only authorized parties can decrypt.

This fundamentally redefines the security perimeter, moving beyond traditional "encrypt-decrypt-process" cycles to achieve a truly "process-while-encrypted" paradigm. Data remains in its encrypted state from initial ingestion through final output, eliminating critical exposure points that adversaries typically exploit.

FHE directly addresses the vulnerabilities identified by transforming the very nature of data handling within AI workflows. This ensures data privacy and integrity without compromising operational efficiency.

Mirror's VectaX represents the practical implementation of FHE technology specifically designed for AI workloads. Our solution transforms theoretical cryptographic capabilities into a production-ready security framework that integrates seamlessly with existing AI infrastructure.

AI models operate on encrypted data throughout the entire pipeline from initial input through final output—never requiring decryption at any stage. This eliminates the traditional vulnerability windows where data exists in plaintext form across all ecosystem components.

FHE preserves full AI capabilities including training, inference, and real-time processing without performance degradation, ensuring security doesn't compromise operational efficiency. Mirror's VectaX achieves this through optimized homomorphic operations specifically designed for neural network computations and vector operations.

Data remains encrypted from source systems through AI processing to result delivery, reducing the vulnerable decryption points our research identified across the ecosystem. Only authorized endpoints with proper cryptographic keys can access the final decrypted results.

We stand at a pivotal moment. As AI adoption accelerates across industries, the attack chains we've documented—from prompt injection to credential harvesting and tool poisoning—create an expanding threat surface that only cryptographic solutions like FHE can effectively address. These vulnerabilities persist because traditional security operates on plaintext data, while FHE eliminates the exposure points entirely by maintaining encryption throughout all AI operations.

Our research reveals a critical juncture in AI security. The 87% data security gap, combined with 73-91% attack success rates across AI extensions, agents, and protocols, demonstrates that current security measures are fundamentally inadequate for the AI era. This vulnerability is compounded by a dangerous disconnect: while 77% of organizations believe their AI systems are secure, only 9% have implemented AI security across their AI infrastructure.

Foundation, Not Policies
Outsourcing security to AI third-party providers through trust policies leaves critical data exposure problems unresolved, requiring organizations to embed foundational security directly into their AI architecture.

Encryption Throughout
End-to-end encryption through FHE implementation needs to become the foundational standard for AI deployments, not an afterthought.

Implementation Readiness
With FHE now available as a proven solution, enterprises can finally secure their AI implementations against data breaches and protect the integrity of their AI-driven operations.