Google Cloud secures $10B deal with a cybersecurity giant
What's the story
Google Cloud, a subsidiary of Alphabet, has signed an expanded partnership with cybersecurity firm Palo Alto Networks. The deal is said to be Google's largest security services contract yet, according to Reuters. A source familiar with the matter revealed that the agreement includes a commitment from Palo Alto to pay "approaching $10 billion" to Google Cloud over several years.
AI integration
AI services to be added under the deal
Part of the investment will be used to move Palo Alto's existing products onto Google's platform. However, a major chunk of it will go into adding new services that involve artificial intelligence (AI). BJ Jenkins, President of Palo Alto Networks, told Reuters that "AI has spawned a tremendous amount of demand for security."
Industry shift
Cybersecurity's evolution in the age of AI
Despite AI revolutionizing many business functions, cybersecurity is still evolving. Jenkins compared this phase to the early days of cloud computing when new security threats emerged. He said, "This is the same as when the cloud began to emerge and there were new security threats that no one had ever imagined."
AI threat
Cyberattacks increasingly use generative AI tools
Cyberattacks are now being carried out by the very same generative AI tools that security providers are using to bolster defenses. Both Google and Palo Alto have heavily invested in security software as businesses look to adopt AI. Google's $32 billion acquisition of Wiz, a security firm, is still awaiting regulatory approval.
Business expansion
Palo Alto's AI-driven offerings and acquisition plans
In October, Palo Alto launched AI-driven offerings and last month, it announced plans to acquire software company Chronosphere for $3.35 billion. Matt Renner, Chief Revenue Officer of Google Cloud, said this new deal highlights their strategic position as AI reshapes the competitive landscape against rivals like Amazon and Microsoft.