Palo Alto Networks is eyeing a Seattle-based artificial intelligence cybersecurity startup as its biggest acquisition since 2020, said a report. Palo Alto stock dipped amid the news as the Nasdaq composite also fell.
Palo Alto could acquire AI cybersecurity startup ProtectAI for around $650 million to $700 million, said the report.
"ProtectAI would position Palo Alto Networks as one of the first movers amongst incumbents looking to more directly solve security challenges at the AI model/app layer," said UBS analyst Roger Boyd in a report.
Meanwhile, ProtectAI competes with Securiti.AI, Mindguard, Robust Intelligence, Calypso, HiddenLayer and Lasso Security.
Boyd said ProtectAI would mark Palo Alto's largest acquisition since Expanse in 2020.
Acquisition Spree
Under Chief Executive Nikesh Arora, who took the helm in June, 2018, Palo Alto has also acquired Cortex XDR, Talon and Demisto. The company has spent $4 billion on 19 acquisitions since 2018. Along the way, Arora remade the cybersecurity firm into a broad platform solutions provider via cloud computing services.
"Although the technology behind AI security is still in a place of rapid innovation, we see a potential bull case around acquiring into the space, and to some extent believe that enterprises are looking for incumbent security platforms to lead the way," said Boyd. "This is the playbook that Palo Alto executed successfully against early in the cloud security market. In addition, with a number of still early stage AI model/app security focused vendors out there, we wouldn't be surprised if other companies in our coverage look to follow suit."
Palo Alto has expanded from the network firewall business into security operations center management, endpoint protection and other areas.
In the network firewall market, Palo Alto competes with Fortinet, Cisco Systems, Check Point Software Technologies and others. Firewall appliances protect computer networks by inspecting data traffic and blocking online intrusions.
On the stock market today, Palo Alto stock dipped more than 2% to 168.49.
Further, PANW stock has retreated 4% in 2025.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
