Palo Alto Networks PANW, the global cybersecurity powerhouse with a market capitalization nearing $120 billion, is making a high-stakes move into the world of AI security with the acquisition of Protect AI, a Seattle-based startup that's risen fast in the red-hot artificial intelligence space.
The deal, announced Monday, is expected to close later this year. The transaction is valued at over $500 million, GeekWire reported, citing sources familiar with the transaction.
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Big Names Back a Big Bet on AI Security
Protect AI, founded in 2022 by former engineering leaders from Amazon AMZN, Oracle ORCL, and Amazon Web Services, helps enterprise customers secure machine learning systems by monitoring every layer of the AI pipeline, from data to deployment. It's one of the few startups solely focused on the growing threat landscape surrounding AI-based attacks.
Protect AI has attracted a notable roster of investors, including Salesforce Ventures, Samsung's Venture Investment Corp., and 01 Advisors, a VC firm co-founded by former Twitter executives.
According to Bloomberg, the company raised a $60 million Series B round in 2024, bringing its total valuation at the time to approximately $400 million.
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Prisma AIRS, Palo Alto's Push Into AI Risk Mitigation
Palo Alto Networks said the acquisition would be integrated into its newly launched AI-native security platform. The platform aims to defend organizations from emerging threats like model manipulation, prompt injection, training data poisoning, and supply chain vulnerabilities, risks that traditional cybersecurity tools often overlook.
Ian Swanson, CEO of Protect AI, wrote in a LinkedIn post that the company set out to “help organizations secure the most important technology of our time: AI.” He credited the company's team, investors, and growing industry urgency for helping them build what he called “category-leading solutions.”
A Founding Team with Deep Tech Pedigree
Protect AI was co-founded by Swanson, Badar Ahmed, and Daryan Dehghanpisheh, all of whom previously held senior positions at AI-focused startups acquired by tech giants. Swanson's previous ventures include Sometrics, which was acquired by American Express AXP in 2011, writes GeekWire.
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The startup has also made strategic acquisitions of its own, snapping up Laiyer AI, SydeLabs, Rebuff, and Huntr to expand its capabilities in red-teaming large language models and securing open-source AI supply chains. According to GeekWire, Protect AI currently employs around 120 people across offices in Seattle, Berlin, and Bangalore.
Strategic Moves with Long-Term Vision
The acquisition comes as cybersecurity experts warn of a widening AI threat surface. A 2024 report by HiddenLayer revealed that nearly three-fourths of enterprises experienced at least one AI-related breach last year. That statistic has turned AI security from a niche concern into a boardroom priority.
Analysts expect massive growth in the space. In a 2024 report, Morgan Stanley projected the AI cybersecurity market will surge to $135 billion by 2030, reflecting a deepening need for solutions that can secure advanced machine learning environments.
This acquisition signals Palo Alto Networks' growing interest in AI-specific security as the technology becomes more embedded across sectors like software, finance, healthcare, and government.
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