Reasoning Topology Matters: A Controlled Study of LLM-Based Cybersecurity Analysis

Large language models (LLMs) are increasingly used in cybersecurity workflows, yet it remains unclear whether they can perform structured security reasoning or merely rely on superficial cues and prior knowledge. We study this question in the context of defence selection over attack graphs derived from real-world threat scenarios, including ransomware, supply-chain compromise, cloud abuse, Kubernetes attacks, POS malware, and ICS/OT intrusion. Given a budget constraint, LLMs must select security controls to minimise attacker success. We compare their strategies against each other and against a game-theoretic optimization baseline used as a normative reference for structured reasoning. Our results show that LLMs exhibit conditional competence. When explicit attack-graph structure is provided, they often produce coherent strategies close to the optimization baseline. However, their capabilities are fragile. LLM behaviour becomes increasingly fragile with graph complexity and is highly sensitive to framing. Small prompt changes can substantially alter rankings, and merely relabeling a poor strategy as ``optimal'' dramatically improves its evaluation. We further observe a non-monotonic relationship between formal risk and LLM judgement: strategies closest to the optimum are not necessarily ranked highest by LLM evaluators. To further probe reasoning ability, we ask LLMs to generate solvers for the same optimization problem. While the generated implementations recover the correct high-level formulation, they scale poorly compared to a purpose-built solver. Overall, our findings show that LLMs can approximate structured cybersecurity reasoning under controlled representations, but do not apply it robustly. This has important implications for the design and evaluation of AI-assisted security decision-support systems.

Chain-of-Thought (CoT) prompting has been used to enhance the reasoning capability of LLMs. However, its reliability in security-sensitive analytical tasks remains insufficiently examined, particularly under structured human evaluation. Alternative approaches, such as model scaling and fine-tuning can be used to help improve performance. These methods are also often costly, computationally intensive, or difficult to audit. In contrast, prompt engineering provides a lightweight, transparent, and controllable mechanism for guiding LLM reasoning. This study proposes a structured prompt engineering framework designed to strengthen CoT reasoning integrity while improving security threat and attack detection reliability in local LLM deployments. The framework includes 16 factors grouped into four core dimensions: (1) Context and Scope Control, (2) Evidence Grounding and Traceability, (3) Reasoning Structure and Cognitive Control, and (4) Security-Specific Analytical Constraints. Rather than optimizing the wording of the prompt heuristically, the framework introduces explicit reasoning controls to mitigate hallucination and prevent reasoning drift, as well as strengthening interpretability in security-sensitive contexts. Using DDoS attack detection in SDN traffic as a case study, multiple model families were evaluated under structured and unstructured prompting conditions. Pareto frontier analysis and ablation experiments demonstrate consistent reasoning improvements (up to 40% in smaller models) and stable accuracy gains across scales. Human evaluation with strong inter-rater agreement (Cohen's k > 0.80) confirms robustness. The results establish structured prompting as an effective and practical approach for reliable and explainable AI-driven cybersecurity analysis.

Large language models (LLMs) are transforming everyday applications, yet deployment in cybersecurity lags due to a lack of high-quality, domain-specific models and training datasets. To address this gap, we present CyberPal 2.0, a family of cybersecurity-expert small language models (SLMs) ranging from 4B-20B parameters. To train CyberPal 2.0, we generate an enriched chain-of-thought cybersecurity instruction dataset built with our data enrichment and formatting pipeline, SecKnowledge 2.0, which integrates expert-in-the-loop steering of reasoning formats alongside LLM-driven multi-step grounding, yielding higher-fidelity, task-grounded reasoning traces for security tasks. Across diverse cybersecurity benchmarks, CyberPal 2.0 consistently outperforms its baselines and matches or surpasses various open and closed-source frontier models, while remaining a fraction of their size. On core cyber threat intelligence knowledge tasks, our models outperform almost all tested frontier models, ranking second only to Sec-Gemini v1. On core threat-investigation tasks, such as correlating vulnerabilities and bug tickets with weaknesses, our best 20B-parameter model outperforms GPT-4o, o1, o3-mini, and Sec-Gemini v1, ranking first, while our smallest 4B-parameter model ranks second.