Trillion-dollar old facilities are facing obsolescence! CEO Palo Alto (PANW.US) boasted: AI is not a disaster of extinction, but an excellent feast

The Zhitong Finance App learned that cybersecurity company Palo Alto Networks (PANW.US) CEO Nikish Arora said on Tuesday that artificial intelligence is forcing major companies to completely refurbish the old cybersecurity infrastructure worth about 1 trillion US dollars and built for the pre-AI era.

“Any facility deployed seven or ten years ago couldn't handle or be prepared to process AI at machine speed,” Alola said on the show. You have to re-examine your network architecture.”

Palo Alto's earnings report on Tuesday showed that this sense of urgency is already translating into business results. The company's fourth-quarter results beat expectations and issued a strong outlook for the new fiscal year.

Alola anticipates that this market opportunity will continue to expand as AI enables attackers to discover and exploit vulnerabilities faster than ever before, forcing businesses to upgrade security protections not designed for automated threats. “If you don't do a good job in cybersecurity, you can't successfully deploy AI,” he said.

“The world's roughly $1 trillion cybersecurity debt must be modernized to combat automated threats because these threats are instantaneous,” Alola said during Palo Alto's earnings call.

This opportunity marks a dramatic reversal of investors' views on AI's impact on cybersecurity earlier this year. Palo Alto and other cybersecurity stocks were previously under pressure due to concerns that increasingly powerful AI models could disrupt traditional security software. Eventually, as investors realised that attackers could also weaponize this technology, the market began to see AI as an engine for growth.

“Nine months ago... we were convicted and almost executed because people thought AI would steal our lunch, breakfast, and dinner,” Alola said. “That doesn't seem to be the case right now. Looks like we're going to have to go to this feast with them.”

Arora pointed out that the advent of Anthropic's Mythos model earlier this year was a turning point. Mythos has prompted companies to pay more attention to cybersecurity because this model can easily be used to exploit software vulnerabilities. Palo Alto's stock price has jumped 113% since April 7. Until that node, the stock had been in the red in 2026.

“I've been trying to tell customers for eight years that they're not ready, and Anthropic did that with the release of Mythos alone,” Alola said.

Alola said Palo Alto has negotiated its “Frontier AI Critical Defense Program” (Frontier AI Critical Defense Program) with around 2000 companies, which uses advanced AI models to test customers' defenses, identify vulnerabilities, and help them modernize their security infrastructure. The company officially launched the initiative in August.

Although Alola warned that these expenses would not be achieved in one fell swoop, he said AI has fundamentally expanded the scale and duration of market opportunities in the cybersecurity industry.

“Not everything is going to happen next quarter,” Alola said, “but what I can say is that it's changing the long-term growth rate and duration of cybersecurity, not just for Palo Alto, but for the industry as a whole.”