Ransomware is 35 years old and now a billion-dollar problem. Here’s how it could evolve
As the ransomware industry evolves, experts are predicting hackers will only continue to find more and more ways of using the technology to exploit businesses and individuals.
Seksan Mongkhonkhamsao | Moment | Getty Images
Ransomware is now a billion-dollar industry. But it wasn’t always that large — nor was it a prevalent cybersecurity risk like it is today.
Dating back to the 1980s, ransomware is a form of malware used by cybercriminals to lock files on a person’s computer and demand payment to unlock them.
The technology — which officially turned 35 on Dec. 12 — has come a long way, with criminals now able to spin up ransomware much faster and deploy it across multiple targets.
Cybercriminals raked in $1 billion of extorted cryptocurrency payments from ransomware victims in 2023 — a record high, according to data from blockchain analysis firm Chainalysis.
Experts expect ransomware to continue evolving, with modern-day cloud computing tech, artificial intelligence and geopolitics shaping the future.
How did ransomware come about?
The first event considered to be a ransomware attack happened in 1989.
A hacker physically mailed floppy disks claiming to contain software that could help determine whether someone was at risk of developing AIDs.
However, when installed, the software would hide directories and encrypt file names on people’s computers after they’d rebooted 90 times.
It would then display a ransom note requesting a cashier’s check to be sent to an address in Panama for a license to restore the files and directories.
The program became known by the cybersecurity community as the “AIDs Trojan.”
“It was the first ransomware and it came from someone’s imagination. It wasn’t something that they’d read about or that had been researched,” Martin Lee, EMEA lead for Talos, the cyber threat intelligence division of IT equipment giant Cisco, told CNBC in an interview.
“Prior to that, it was just never discussed. There wasn’t even the theoretical concept of ransomware.”
The perpetrator, a Harvard-taught biologist named Joseph Popp, was caught and arrested. However, after displaying erratic behavior, he was found unfit to stand trial and returned to the United States.
How ransomware has developed
Since the AIDs Trojan emerged, ransomware has evolved a great deal. In 2004, a threat actor targeted Russian citizens with a criminal ransomware program known today as “GPCode.”
The program was delivered to people via email — an attack method today commonly known as “phishing.” Users, tempted with the promise of an attractive career offer, would download an attachment which contained malware disguising itself as a job application form.
Once opened, the attachment downloaded and installed malware on the victim’s computer, scanning the file system and encrypting files and demanding payment via wire transfer.
Then, in the early 2010s, ransomware hackers turned to crypto as a method of payment.
In 2013, only a few years after the creation of bitcoin, the CryptoLocker ransomware emerged.
Hackers targeting people with this program demanded payment in either bitcoin or prepaid cash vouchers — but it was an early example of how crypto became the currency of choice for ransomware attackers.
Later, more prominent examples of ransomware attacks that selected crypto as the ransom payment method of choice included the likes of WannaCry and Petya.
“Cryptocurrencies provide many advantages for the bad guys, precisely because it is a way of transferring value and money outside of the regulated banking system in a way that is anonymous and immutable,” Lee told CNBC. “If somebody’s paid you, that payment can’t be rolled back.”
CryptoLocker also became notorious in the cybersecurity community as one of the earliest examples of a “ransomware-as-a-service” operation — that is, a ransomware service sold by developers to more novice hackers for a fee to allow them to carry out attacks.
“In the early 2010s, we have this increase in professionalization,” Lee said, adding that the gang behind CryptoLocker were “very successful in operating the crime.”
What’s next for ransomware?
As the ransomware industry evolves even further, experts are predicting hackers will only continue to find more and more ways of using the technology to exploit businesses and individuals.
By 2031, ransomware is predicted to cost victims a combined $265 billion annually, according to a report from Cybersecurity Ventures.
Some experts worry AI has lowered the barrier to entry for criminals looking to create and use ransomware. Generative AI tools like OpenAI’s ChatGPT allow everyday internet users to insert text-based queries and requests and get sophisticated, humanlike answers in response — and many programmers are even using it to help them write code.
Mike Beck, chief information security officer of Darktrace, told CNBC’s “Squawk Box Europe” there’s a “huge opportunity” for AI — both in arming the cybercriminals and improving productivity and operations within cybersecurity companies.
“We have to arm ourselves with the same tools that the bad guys are using,” Beck said. “The bad guys are going to be using the same tooling that is being used alongside all that kind of change today.”
But Lee doesn’t think AI poses as severe a ransomware risk as many would think.
“There’s a lot of hypothesis about AI being very good for social engineering,” Lee told CNBC. “However, when you look at the attacks that are out there and clearly working, it tends to be the simplest ones that are so successful.”
Targeting cloud systems
A serious threat to watch out for in future could be hackers targeting cloud systems, which enable businesses to store data and host websites and apps remotely from far-flung data centers.
“We haven’t seen an awful lot of ransomware hitting cloud systems, and I think that’s likely to be the future as it progresses,” Lee said.
We could eventually see ransomware attacks that encrypt cloud assets or withhold access to them by changing credentials or using identity-based attacks to deny users access, according to Lee.
Geopolitics is also expected to play a key role in the way ransomware evolves in the years to come.
“Over the last 10 years, the distinction between criminal ransomware and nation-state attacks is becoming increasingly blurred, and ransomware is becoming a geopolitical weapon that can be used as a tool of geopolitics to disrupt organizations in countries perceived as hostile,” Lee said.
“I think we’re probably going to see more of that,” he added. “It’s fascinating to see how the criminal world could be co-opted by a nation state to do its bidding.”
Another risk Lee sees gaining traction is autonomously distributed ransomware.
“There is still scope for there to be more ransomwares out there that spread autonomously — perhaps not hitting everything in their path but limiting themselves to a specific domain or a specific organization,” he told CNBC.
Lee also expects ransomware-as-a-service to expand rapidly.
“I think we will increasingly see the ransomware ecosystem becoming increasingly professionalized, moving almost exclusively towards that ransomware-as-a-service model,” he said.
But even as the ways criminals use ransomware are set to evolve, the actual makeup of the technology isn’t expected to change too drastically in the coming years.
“Outside of RaaS providers and those leveraging stolen or procured toolchains, credentials and system access have proven to be effective,” Jake King, security lead at internet search firm Elastic, told CNBC.
“Until further roadblocks appear for adversaries, we will likely continue to observe the same patterns.”
Nvidia CEO Jensen Huang says artificial intelligence is the “great equalizer” because it lets anyone program using everyday language.
Speaking at London Tech Week on Monday, Huang said that, historically, computing was hard and not available to everyone. “We had to learn programming languages. We had to architect it. We had to design these computers that are very complicated,” he said on stage alongside U.K. Prime Minister Kier Starmer.
“Now, all of a sudden … there’s a new programming language. This new programming language is called ‘human.'”
Conversational AI models were thrown into the spotlight in 2022 when OpenAI‘s ChatGPT exploded onto the scene. In February, the San Francisco-based tech company said it had 400 million weekly active users.
Users can ask chatbots, such as ChatGPT, Google’s Gemini or Microsoft’s Copilot, questions and they respond in a conversational way that feels more like talking to another human than an AI system.
Jensen Huang, co-founder and chief executive officer of Nvidia, at the London Tech Week exposition in London, UK, on Monday, June 9, 2025.
Bloomberg | Bloomberg | Getty Images
CEO Huang, whose company engineers some of the world’s most advanced semiconductors and AI chips, highlighted that this technology can now be used in programming. He highlighted that very few people know how to use programming languages like C++ or Python, but “everybody … knows ‘human’.”
“The way you program a computer today, to ask the computer to do something for you, even write a program, generate images, write a poem — just ask it nicely,” he said. “And the thing that’s really, really quite amazing is the way you program an AI is like the way you program a person.”
He gave the example of simply asking a computer to write a poem to describe the keynote speech at the London Tech Week event.
“You say: You are an incredible poet … And I would like you to write a poem to describe today’s keynote. And without very much effort, this AI would help you generate such a wonderful poem,” he said.
“And when it answers … you could say: I feel like you could do even better. And it would go off and think about it, and it’ll come back and say, in fact, I I can do better, and it does do a better job.”
Huang’s comments come as a growing number of companies — such as Shopify, Duolingo and Fiverr — encourage their employees to incorporate AI into their work. Indeed, last week OpenAI announced that it has 3 million paying business users.
Huang regularly touts AI’s ability to help workers do their jobs more efficiently and has encouraged workers to embrace the technology as they look to make themselves valuable employees — especially given the horror stories around AI’s potential to replace jobs.
“This way of interacting with computers, I think, is something that almost anybody can do, and I would just encourage everybody to engage it,” Huang added on Monday. “Children are already doing that themselves naturally, and this is going to be transformative.
— CNBC’s Cheyenne DeVon and Ashton Jackson contributed to this report.
Jakub Porzycki | Nurphoto | Getty Images
LONDON — Britain’s financial services watchdog on Monday announced a new tie-up with U.S. chipmaker Nvidia to let banks safely experiment with artificial intelligence.
The Financial Conduct Authority said it will launch a so-called Supercharged Sandbox that will “give firms access to better data, technical expertise and regulatory support to speed up innovation.”
Starting from October, financial services institutions in the U.K. will be allowed to experiment with AI using Nvidia’s accelerated computing and AI Enterprise Software products, the watchdog said in a press release.
The initiative is designed for firms in the “discovery and experiment phase” with AI, the FCA noted, adding that a separate live testing service exists for firms further along in AI development.
“This collaboration will help those that want to test AI ideas but who lack the capabilities to do so,” Jessica Rusu, the FCA’s chief data, intelligence and information officer, said in a statement. “We’ll help firms harness AI to benefit our markets and consumers, while supporting economic growth.”
The FCA’s new sandbox addresses a key issue for banks, which have faced challenges shipping advanced new AI tools to their customers amid concerns over risks around privacy and fraud.
Large language models from the likes of OpenAI and Google send data back to overseas facilities — and privacy regulators have raised the alarm over how this information is stored and processed. There have meanwhile been several instances of malicious actors using generative AI to scam people.
Nvidia is behind the graphics processing units, or GPUs, used to train and run powerful AI models. The company’s CEO, Jensen Huang, is expected to give a keynote talk at a tech conference in London on Monday morning.
Last year, HSBC’s generative AI lead, Edward Achtner, told a London tech conference he sees “a lot of success theater” in finance when it comes to artificial intelligence — hinting that some financial services firms are touting advances in AI without tangible product innovations to show for it.
He added that, while banks like HSBC have used AI for many years, new generative AI tools like OpenAI’s ChatGPT come with their own unique compliance risks.
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