Nikesh Arora, Palo Alto’s chief executive officer (CEO), said Tuesday (local time) that (AI) is pressuring companies to upgrade nearly $1 trillion worth of ageing cybersecurity infrastructure built for a pre-AI world.
Arora made these remarks to CNBC and said, “Nothing that was deployed seven or 10 years ago is prepared or ready to handle AI at machine speed,” adding, “You have to rethink your cyber architecture.”
Palo Alto expects demand for cybersecurity products to grow
Arora expects demand for products to grow as AI allows attackers to find and exploit vulnerabilities faster than ever before, forcing companies to modernise security defences that were not designed to handle automated threats. He said, “You cannot deploy AI successfully if you don’t get cybersecurity right.”
That growing demand marks a dramatic reversal in how investors viewed AI’s impact on cybersecurity earlier this year. Networks and other cybersecurity stocks came under pressure amid fears that increasingly capable AI models could disrupt traditional security software. However, as investors recognised that attackers could weaponise the same technology, the market began to see AI as a potential growth driver for the cybersecurity industry.
He said, “Nine months ago, … we were guilty and convicted of near death because AI was going to eat our lunch, breakfast, and dinner,” adding, “It seems like that’s not the case. It seems like we’re going to have to have the feast with them.”
How AI threats turned cybersecurity into a growth opportunity
Arora identified the launch of Anthropic’s model earlier this year as a major turning point. The model heightened companies’ concerns about cybersecurity because of its ability to exploit software vulnerabilities with relative ease. Palo Alto’s shares have since climbed 113 per cent from 7 April, after remaining in negative territory for much of 2026 before then.
He further said that he had spent eight years warning customers that they were unprepared, but the launch of Mythos by Anthropic CEO Dario Amodei made the risks clear in a single event.
He went on to say that the company had held conversations with at least 2,000 companies about its Frontier AI Critical Defense Program. The initiative uses advanced models to assess customers’ security systems, uncover vulnerabilities and help upgrade their cybersecurity infrastructure. The company officially launched the programme in August.
Palo Alto reports earnings
Palo Alto Networks’ report on Tuesday showed that growing demand for is driving stronger business activity, with the company exceeding analysts’ estimates for the fiscal fourth quarter and issuing an upbeat outlook for the new fiscal year. It projected adjusted earnings of $4.16 to $4.19 per share, above Wall Street’s average estimate of $4.11, as businesses increase spending to counter the growing risks posed by advanced AI systems. Revenue from next-generation security products on an annual recurring basis also surpassed expectations, Bloomberg reported.
Commenting on the earnings call, Arora said, “There’s approximately $1 trillion of global cybersecurity debt that must be modernized to defend against automated threats because they operate instantaneously.”