Nir Zuk, founder and CTO at the cybersecurity giant, says the need for massive amounts of data and the rise of AI will make it difficult for new startups to replicate what he accomplished with the company.
The era of cybersecurity startups going on to become megalithic companies like Palo Alto Networks is over.
That’s according to the company’s founder, at least. On Wednesday, Palo Alto Networks founder and CTO Nir Zuk weighed in on whether it’s even possible for current cybersecurity startups to repeat what he and Palo Alto Networks accomplished.
“The answer is, probably not,” Zuk said in response to a question from CRN on the topic at the vendor’s Ignite on Tour 2025 event in New York.
[Related: Palo Alto Networks Channel Chief On Why AI, Platformization Go Hand-In-Hand]
While in no way unbiased — he of course has a vested interest in his company staying ahead of startup innovation — he also might be right.
As with so many things in today’s tech industry, the question comes down to data, according to Zuk.
To really become a cybersecurity titan in today’s environment, you need massive quantities of it, he said. There’s simply no way to get that data quickly — and so a new player can never really get past a certain level, the argument goes.
The rise of AI in cybersecurity, where the need for unimaginable amounts of reliable data is paramount, is one of many pieces of evidence for this line of thought, Zuk said.
“I think that today, competing against a large vendor like Palo Alto Networks in the cybersecurity space, especially given the [expansion of] AI, is like trying to build a new search company and compete against Google,” he said in response to CRN’s question. “There’s no way for you to get the data.”
Zuk’s unique vantage point on the topic is worth noting. He departed Check Point Software Technologies to found Palo Alto Networks in 2005. There, he and the company famously pioneered the next-generation firewall — disrupting the network security space (and his former employer) in the process.
Today, Palo Alto Networks does a lot more than firewalls. The company serves just about every major category of cybersecurity with its broad platform, and enjoys by far the largest market capitalization of any standalone security vendor (currently $118 billion).
And without a data advantage, competing with Palo Alto Networks and the handful of other largest cybersecurity vendors is tough and only going to get tougher, according to Zuk.
“If you have a lot of good data, your AI is better. And when you compete against other vendors, you win, and then [as a result] you have more data,” he said. “It just creates this positive feedback loop that other vendors cannot get into.”
Comparing cybersecurity to the search engine market is a valid analogy not just because both depend on having data, he said — but also because in both cases, “there’s just no way to buy that data. You have to collect it over many, many years.”
Cybersecurity is now at that point, Zuk said. And as a result, “I think that it’s going to be very hard for new vendors or smaller vendors to deliver AI that works because they don’t have the data.”
The argument is a bit easier to make today than it would’ve been even a few weeks ago, in the wake of Google’s $32 billion deal to acquire Wiz, a cloud and AI security vendor that has seemed to be on a trajectory to join the cybersecurity industry giants.
But the fact that Wiz has been such an outlier in the cybersecurity startup world may just be the exception that proves the rule that Zuk is arguing for.
Again, Zuk is far from a disinterested party on this question. But it’s worth mentioning one more thing about his assessment: It’s something he believes in strongly enough to influence his own personal investing strategy.
“I invest in health tech and in defense tech and in fintech,” he said Wednesday. “I think these are the areas where AI is still not giving the vendors the advantage.”
However, “if you look at my personal investments, I don’t invest in cybersecurity.”
