Artificial intelligence is accelerating cyber threats faster than most defenses can keep up, leaving an estimated $1 trillion in aging infrastructure exposed, Palo Alto Networks CEO Nikesh Arora stated.
Outdated systems built for a slower era
The issue extends beyond AI’s growing sophistication. Security tools designed years ago were never meant to counter machine-speed attacks. “Nothing that was deployed seven or 10 years ago is prepared or ready to handle AI at machine speed,” Arora told CNBC’s Jim Cramer on “Mad Money.” “You have to rethink your cyber architecture.”
His comments came as Palo Alto reported strong fiscal fourth-quarter earnings, surpassing expectations and setting a positive outlook. The company’s stock has climbed 113% since early April, recovering from earlier losses.
Arora described the situation as a critical moment for businesses adopting AI while attackers exploit the same technology to breach systems faster than human responses allow. “You cannot deploy AI successfully if you don’t get cybersecurity right,” Arora said. Automated threats operate in real time, but older systems lack the capacity to match that speed.
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A trillion-dollar problem, but not an immediate solution
The $1 trillion figure represents what Arora termed “global cybersecurity debt”—the expense of upgrading defenses to counter AI-driven attacks. During Palo Alto’s earnings call, Arora put a price tag on the infrastructure challenge facing companies around the world. “There’s approximately $1 trillion of global cybersecurity debt that must be modernized to defend against automated threats because they operate instantaneously,” he said.
Investor concerns earlier this year suggested AI might disrupt traditional cybersecurity, weighing on sector stocks. That narrative shifted after Anthropic introduced its Mythos model, demonstrating how AI could be used to identify and exploit software flaws. “I’ve been trying for eight years to tell customers they’re not ready, and [Anthropic CEO Dario Amodei] did it in one event, just by launching Mythos,” Arora said.
The change in perception has been stark. Nine months ago, Palo Alto was seen as vulnerable, with AI expected to replace its core services. “Nine months ago, … we were guilty and convicted of near death because AI was going to eat our lunch, breakfast, and dinner,” he told Cramer. “It seems like that’s not the case. It seems like we’re going to have to have the feast with them.”
Instead, Arora sees AI changing the industry’s trajectory over a much longer period. “Not everything’s going to happen next quarter,” Arora told Cramer. Modernizing cybersecurity infrastructure will take years, as companies confront the reality that existing systems were never built for threats moving at machine speed.
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A long-term investment in cybersecurity’s future
Palo Alto is banking on this shift with its Frontier AI Critical Defense Program, launched in May. The initiative uses AI to test defenses, uncover weaknesses, and guide upgrades. So far, about 2,000 businesses have engaged with the program, indicating strong demand for proactive measures.
Arora views this as more than a short-term opportunity. “It alters the long-term growth rate and duration of cybersecurity,” he said. AI won’t just reshape security—it will extend its importance, forcing companies to invest in defenses that can keep up with changing threats.
Adaptation speed will determine which businesses stay ahead. Those delaying may struggle in an environment where the rules change constantly.