The One Big Beautiful Bill Act (“OBBBA”) (Publ. Law 119-21), enacted in July 2025, is a sweeping piece of legislation that addresses many issues. Among them, it allocates $1 billion over four years to boost U.S. offensive cyber operations. These funds primarily will be used to strengthen the capabilities of U.S. Indo‑Pacific Command (INDOPACOM) amid sustained tensions with China. Notably, the same legislation also cut approximately $1.2 billion from civilian defensive cybersecurity budgets with implications for the private sector.
From a civilian perspective, the expansion of U.S. offensive cyber capabilities combined with decreased funding to civilian defensive cybersecurity budgets could have implications for the private sector, particularly for government contractors and those involved in federal systems, as well as more localized public and private entities such as localized hospitals, municipalities, and businesses. In the article below, we highlight some potential implications, as well as recommendations on preparedness measures to take into account.
Operational Implications
Retaliatory Blowback Risk
Increasing offensive cyber activity could invite reciprocal cyber-attacks against the U.S. by foreign state actors. While the bill does not introduce any tactics or tools that may be used, in the past the U.S. has focused heavily on system exploitation and intelligence gathering. Potential high value targets include federal assets and public-private enterprises with security and resiliency ramifications for local infrastructure.
Collateral Exposure via Supply Chains
As the cyber ecosystem becomes increasingly reliant on third-party vendors (especially those offering zero-day access and offensive tooling) organizations become indirect participants or collateral victims in cyber conflict. Supply chain opacity and unclear vendor practices will only further compound these potential risks. Organizations should have clear communication with each of their vendors and have a suitable responsibility model in place to maximize transparency and minimize exposure to any potential attacks.
Attribution and Legal Complexity
Many offensive cyber acts, particularly when conducted on behalf of a nation-state, often occur in domains where attribution is ambiguous or intentionally obfuscated such as in attacks on critical infrastructure sectors such as defense, financial services, energy/utilities, and healthcare. Such ambiguity can complicate remediation efforts for the private sector, for instance, if a given cyber incident is determined to involve a foreign state-actor. Moreover, the available technical and legal responses are especially implicated if the offensive and counter-offensive cyber operations spill into private sector infrastructure or international supply chains.
Regulatory and Compliance Domains
As the U.S. shifts towards a more overtly offensive security posture, which may invite an increase in retaliatory activity from abroad, we could see an increased emphasis by various law enforcement and regulatory agencies on reporting and sharing of information related to any attacks suffered by private sector entities. Namely, we could see relevant agencies such as the SEC, FBI, DOJ, DOT, CISA, and others escalate and prioritize enforcement and compliance actions pertaining to cyber incident mandatory reporting, import/export and sanction controls, and data privacy obligations in connection to foreign state-linked cyber activity.
Advisory Recommendations
As the U.S. government scales offensive cyber capacity, private entities will also need to proactively harden defenses, refine their legal frameworks and cyber policies and protocols, and classify and clarify third-party vendor relationships. Robust preparedness training and active analyses of cyber developments is critically necessary for effective navigation of an ever-changing cybersecurity landscape. Organizations should expand beyond passive technical cyber controls while updating their legal readiness to face ambiguous and delayed attribution coupled with the possibility of additional future regulatory requirements. Recommendations to stay ahead of these pitfalls are as follows:
Incident Response Preparedness
Organizations should have the ability to anticipate and effectively respond to sophisticated cyber incidents that may arise through rapidly evolving geopolitical tensions.
- Update and test incident response plans with regularity.
- Establish clearly documented escalation procedures involving internal teams, legal counsel, and cybersecurity, regulatory, and investigative authorities.
- Define and integrate clear communication strategies to manage public disclosure and stakeholder engagement during all phases of significant incidents.
Vendor and Supply Chain Risk Management
With the shift towards a more offensive cybersecurity posture, it is a fundamental necessity to understand and mitigate risks or threats that may lurk and become manifest through third-party vendor business relationships.
- Thoroughly assess and conduct proper due diligence when onboarding or contracting with new third-party vendors to assess their privacy and cybersecurity controls, with an emphasis on confidentiality, integrity, and availability in addition to industry standard cybersecurity practices.
- Update and implement contractual clarity regarding legal responsibilities, breach notification timelines, indemnification, and other liability in the event of cyber incidents.
- Obtain and regularly exercise the contractual right to periodically audit and assess third-party vendor compliance with their legal, contractual, and other cybersecurity and privacy obligations. This can be done in a risk-based manner according to volume or sensitivity of data shared, size and financial resources of vendor, or other factors as appropriate.
Employee Training and Awareness
Because the majority of security and privacy incidents start with human error, and as artificial intelligence and other technologies increase the sophistication and persuasiveness of social engineering tactics, employees will always be your first line of defense. It is therefore important that cybersecurity best practices and awareness are taught and trained with all staff and all leadership on a regular basis.
- Promote a culture emphasizing the prompt reporting of suspicious insider or external activity and unusual vendor interactions.
- Perform periodic cyber hygiene exercises such as phishing simulations, tabletop exercises, and other assessments of cyber awareness to enhance employee vigilance, preparedness, and resiliency.
- Train all staff and all leadership on emerging AI-enhanced social engineering tactics, risks, and mitigations.
- Centralize management and responsibility for maintaining patches and upgrades on all software and computing systems for all staff as promptly as possible, particularly for organization with large numbers of employees, or high concentration of remote workers.
