“We’re planting the flag”: Palo Alto’s Arora sees CyberArk as key to AI era

Palo Alto Networks CEO Nikesh Arora framed his company’s $25 billion acquisition of CyberArk as a bold bet on the emerging identity needs of AI-powered enterprise systems, touting agentic AI as a “future market” for cybersecurity.

The landmark cash-and-stock deal, announced Wednesday, is Palo Alto’s largest to date and positions the company to enter the identity security space in a decisive way. The acquisition comes amid a broader consolidation wave in cybersecurity, following Google’s $32 billion purchase of Wiz earlier this year.

Nikesh Arora.

“CyberArk allows us the opportunity to go ahead and plant the flag in the future market of agentic AI,” Arora told analysts, emphasizing that autonomous digital agents, capable of writing code, accessing systems, and executing tasks, require identity and privilege controls once reserved for humans.

“All these agents are going to need permissions and access,” Arora said. “We need to manage these agents just the way you manage identities for machines or humans.”

CyberArk’s strength in privileged access and machine identity management, including its $1.5 billion acquisition of Venafi last year, puts it at the center of what Arora sees as a fundamental shift in cybersecurity architecture.

The CEO argued that traditional perimeter-based defenses and patchwork identity solutions are ill-suited for the scale and autonomy of AI-driven systems. CyberArk’s technology, he said, gives Palo Alto the foundation to secure both today’s enterprise systems and the self-directed AI workflows of the near future.

“The rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls,” Arora said in a statement.

CyberArk CEO Matt Cohen echoed the sentiment, saying autonomous agents are “by nature privileged actors” that must be governed dynamically. “That’s where we come in,” Cohen said.

The deal, expected to close in the second half of Palo Alto’s fiscal 2026, would give the California-based company offerings in nearly every major cybersecurity category, broadening its platform appeal to large enterprise clients and setting it up to capture a growing share of AI-driven security budgets.

Still, investor reaction was mixed. Palo Alto’s shares fell 5% on Wednesday as analysts flagged the complexity of integrating a large public company with an entrenched customer base. Arora, whose company has acquired more than 14 firms since 2019, acknowledged the risks but described the move as essential to covering “the majority of the total addressable market” in cybersecurity.