Palo Alto’s M&A strategy is moving deeper into AI
The company’s reported interest in AI-security acquisitions follows major bets on CyberArk, Chronosphere and Israeli startup Koi.
Palo Alto Networks is considering further acquisitions as it expands beyond its traditional cybersecurity businesses, according to a report by The Information, with artificial intelligence security emerging as one of the areas on its radar.
The report said CEO Nikesh Arora previously explored acquisitions of identity-security company Okta and cloud-monitoring company Datadog. Neither deal materialized, but the discussions show the breadth of Palo Alto’s acquisition strategy as it seeks to build a broader security platform.
Palo Alto later agreed to acquire CyberArk for $25 billion and bought observability company Chronosphere for $3.35 billion. The company is now reportedly looking at additional AI-security opportunities.
The strategy is particularly relevant to Israel, which has become an important source of technology for Palo Alto. Since 2014, the company has acquired 12 Israeli cybersecurity companies, accounting for nearly half of its major acquisitions worldwide.
That activity has continued into the AI-security market. Over the past year, Palo Alto has completed five acquisitions, and earlier this year it completed its acquisition of Israeli startup Koi, which focuses on securing AI-driven systems.
The Koi deal is part of Palo Alto’s broader effort to address security risks created by AI systems and agents. As enterprises give AI systems greater access to data, applications and other tools, security vendors are expanding into areas that include AI protection, identity, monitoring and control.
The Information’s report does not identify an Israeli company as a potential target. But Palo Alto’s acquisition history makes Israel a significant part of the company’s broader M&A strategy.
The company has repeatedly used acquisitions to enter new security categories rather than relying solely on internal development. Its interest in Okta and Datadog, followed by the CyberArk and Chronosphere deals, suggests that approach is continuing as Palo Alto expands its platform.
With AI creating a rapidly expanding attack surface, Palo Alto’s next acquisition could add another piece to that strategy. Whether it comes from Israel or elsewhere, The Information’s report indicates that Arora’s M&A ambitions remain active.
