Rethinking HSM and TPM Security in the Cloud: Real-World Attacks and Next-Gen Defenses

As organizations rapidly migrate to the cloud, the security of cryptographic key management has become a growing concern. Hardware Security Modules (HSMs) and Trusted Platform Modules (TPMs), traditionally seen as the gold standard for securing encryption keys and digital trust, are increasingly challenged by cloud-native threats. Real-world breaches have exposed weaknesses in cloud deployments, including misconfigurations, API abuse, and privilege escalations, allowing attackers to access sensitive key material and bypass protections. These incidents reveal that while the hardware remains secure, the surrounding cloud ecosystem introduces systemic vulnerabilities. This paper analyzes notable security failures involving HSMs and TPMs, identifies common attack vectors, and questions longstanding assumptions about their effectiveness in distributed environments. We explore alternative approaches such as confidential computing, post-quantum cryptography, and decentralized key management. Our findings highlight that while HSMs and TPMs still play a role, modern cloud security requires more adaptive, layered architectures. By evaluating both current weaknesses and emerging models, this research equips cloud architects and security engineers with strategies to reinforce cryptographic trust in the evolving threat landscape.