Is the Era of Cybersecurity Startups Over? Insights from Palo Alto Networks' Founder

Nir Zuk's Take on the Future of Cybersecurity Startups

Nir Zuk, the founder and CTO of Palo Alto Networks, recently shared his insights on the challenges facing new cybersecurity startups during the Ignite on Tour 2025 event in New York. He believes that the era of cybersecurity startups achieving monumental success akin to Palo Alto Networks is likely over.

The Data Dilemma

Zuk emphasized that to become a significant player in today’s cybersecurity landscape, startups require massive amounts of data. He stated, “The answer is, probably not,” when asked if current startups could replicate the success of Palo Alto Networks.

In his view, the rise of AI in cybersecurity exacerbates this issue. Competing against established giants like Palo Alto Networks is akin to trying to build a new search engine to rival Google—the data advantage is simply insurmountable.

The Importance of AI and Data

Zuk explained that without a data advantage, new vendors will find it increasingly challenging to offer competitive AI solutions. He noted that having extensive and high-quality data leads to better AI performance, creating a positive feedback loop that is difficult for smaller vendors to penetrate.

“If you have a lot of good data, your AI is better. And when you compete against other vendors, you win,” he stated. This cycle reinforces the dominance of larger firms in the market.

A Cautionary Tale for Startups

Zuk pointed out that the current state of cybersecurity is similar to the search engine market, where data collection takes years and cannot simply be purchased. He believes this makes it very hard for new or smaller vendors to deliver effective AI solutions due to a lack of data.

Recent high-profile acquisitions, like Google’s $32 billion deal to acquire Wiz, a cloud and AI security vendor, highlight the competitive landscape. However, Zuk argues that such occurrences are exceptions rather than the rule, reinforcing his stance on the difficulties faced by startups.

Investment Strategy Reflection

Interestingly, Zuk’s views influence his personal investment strategy. He chooses to invest in sectors like health tech, defense tech, and fintech, where he perceives opportunities for AI innovation, while notably avoiding investments in cybersecurity.

Zuk's unique perspective, rooted in his experience founding and leading one of the most successful cybersecurity companies, raises critical questions about the future of new entrants in this rapidly evolving field.