“We won’t buy out of panic”: Akamai CEO takes measured approach to AI deals
Tom Leighton says the company’s Israeli cyber arm is powering its fastest growth, but warns that discipline, not hype, will guide future acquisitions.
Akamai, one of the oldest high-tech companies to emerge from the dot-com boom of the late 1990s, is today valued at about $12 billion, with revenues expected to reach roughly $4 billion in 2025. The company is best known for its global content delivery network (CDN) but now also operates as a major provider of cloud and cybersecurity services.
Founded in 1998 by several entrepreneurs including Israeli co-founder Daniel Lewin, who was killed aboard one of the planes hijacked in the 9/11 attacks, Akamai began with CDN technology: a global network of distributed servers designed to deliver content more quickly and reliably. Since then, the company has expanded its scope, and today about half its revenue, approximately $2 billion, comes from cybersecurity.
Much of that cyber activity is rooted in Akamai’s Israeli development center, which employs around 700 people and has been built through three significant local acquisitions: Guardicore for about $600 million in 2021; Neosec for tens of millions in 2023; and most recently, Noname Security, purchased in 2024 for $450 million.
Tom Leighton, the company’s founder and CEO since 2013, visited Israel last week. In an interview with Calcalist, he discussed the center’s role in Akamai’s global operations and why technological bubbles - past and present - may not be entirely negative.
What brings you to Israel now?
“We have about 700 employees here, most of them in development and cyber. It’s a good opportunity to meet them, as well as many of our customers. We’re hosting a roundtable with clients to discuss where Akamai is headed and where the market is going.”
Akamai is historically associated with CDN networks. Where is growth coming from today?
“Most of our revenue now comes from the cyber sector. We’re seeing very strong growth, especially with Guardicore, and there are other new areas with huge potential. We’re also focusing on security around artificial intelligence, which requires specialized protection to prevent models from leaking private information or doing ‘bad things.’ We’re investing heavily in ‘first-line’ defense capabilities - systems that detect and block risks before they reach the network.”
The last quarter showed a slowdown in CDN activity. What’s happening in the traditional sector?
“The CDN space is stabilizing. Our cloud business is growing every year, and we’re very encouraged by that. We recently announced a partnership with Nvidia, and we now operate in 17 cities to support AI applications.”
You acquired Noname Security for $450 million, far below its earlier $1 billion valuation. How do you assess the deal?
“We’re seeing great growth. The combination of Noname and Guardicore, along with Neosec, has delivered a 35% year-over-year increase in revenue.”
You’re also invested in the Israeli cyber firm Apiiro. What’s behind that partnership?
“We made a small investment after beginning a strategic collaboration. It has been very successful, and it’s a model we use from time to time.”
Israel’s cyber sector is known for high valuations. How do you view the so-called cyber bubble?
“It’s an exciting field with extraordinary talent. Israel is a world leader in developing new capabilities to counter new attacks. That fuels new companies and high valuations. Israel is an excellent place to acquire companies. But we’re disciplined buyers, we evaluate every deal carefully and always consider our shareholders.”
Are you willing to pay a premium for Israeli cyber or AI companies, given the rapid pace of AI innovation?
“We want to get to market on time, and we have outstanding developers internally. When an acquisition makes sense, we’ll pursue it, but we won’t buy out of panic around GenAI. We can develop many advanced AI capabilities ourselves.”
Are we in an AI bubble?
“Every transformative technology cycle creates excitement. You see new companies, new capabilities, and sometimes extreme valuations. It’s normal. Some companies will become huge; others won’t. It happened during the internet bubble, 99% of the companies from that era are gone, and we’re still here. Yes, eventually there will be a correction, but that’s part of every technological breakthrough.”
How do you view the future of AI beyond giant foundation models?
“There are two dimensions. One is what happens if giant models grow tenfold, but that’s not our focus. The other, discussed by Nvidia CEO Jensen Huang, is the rise of smaller, more specialized models. That’s where we’re building infrastructure and where the near-term impact will be felt. AI will improve efficiency, development, scheduling, and day-to-day operations. The biggest changes will come from many small applications, not only the giant models.”
How central will AI become to Akamai’s products?
“AI is integrated into every area of the company. It makes us more efficient, strengthens our products, and improves customer protection. We’re also providing computing capabilities to run mid-sized models. AI will be part of everything we do, even in ways people may not realize.”
Where do you see Akamai in the coming years?
“The security division, already generating $2 billion, will be very large for us. Our computing and cloud business is also scaling quickly. We believe we can maintain long-term growth.”
What is the future of the Israeli operation?
“We expect very significant growth here. Israel has the smartest people, and we want them working for us. We recruit the best and our recruiting capacity is very high. I come two or three times a year to meet my team.”
Are you considering changes to your work-from-office policy?
“We take a flexible approach, but as more employees return to the office, we’ll need a workspace that fits their needs. People enjoy coming in.”
