Palo Alto Networks Chief Executive Nikesh Arora said Tuesday that the rapid adoption of artificial intelligence is forcing companies to reconsider roughly $1 trillion of cybersecurity infrastructure built for a pre-AI environment, as automated attacks increasingly operate at speeds that legacy defenses were never designed to handle.
“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.”
He made the assertion as Palo Alto reported quarterly results that beat Wall Street expectations and issued a strong outlook for its new fiscal year, suggesting that the security spending Arora describes as necessary is already beginning to translate into commercial demand.
The company estimates that there is approximately $1 trillion in accumulated global “cybersecurity debt” that organizations will need to modernize to defend against automated threats.
“There’s approximately $1 trillion of global cybersecurity debt that must be modernized to defend against automated threats because they operate instantaneously,” Arora said on Palo Alto’s earnings call.
The argument marks a notable shift in the market’s perception of AI and cybersecurity.
Earlier this year, cybersecurity stocks came under pressure as investors worried that capable AI models could automate security functions, reduce demand for conventional cybersecurity software and ultimately disrupt established vendors.
That concern has increasingly given way to a different view: AI is becoming a force multiplier for both attackers and defenders. The same technology that can help security teams identify vulnerabilities and automate responses can also enable attackers to discover weaknesses, develop exploits, and move across networks far faster than human operators.
“You cannot deploy AI successfully if you don’t get cybersecurity right,” Arora said.
From AI Threat to AI Growth Opportunity
Arora described the change in investor sentiment as a dramatic reversal from earlier in the year.
“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.”
He identified the emergence of Anthropic’s Mythos model earlier this year as an important turning point in the industry’s thinking. The model demonstrated how advanced AI could be applied to cybersecurity operations, including the identification and exploitation of software vulnerabilities, intensifying concerns among businesses about whether their existing defenses could withstand machine-driven attacks.
“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.
Palo Alto’s stock has gained 113% since April 7, reversing losses accumulated earlier in 2026 as investors reassessed the impact of AI on the cybersecurity industry.
The change in sentiment reflects a broader realization that AI does not necessarily eliminate the need for cybersecurity software. Instead, it can increase the volume, speed, and sophistication of attacks, potentially expanding the amount companies need to spend to protect increasingly automated and interconnected systems.
Palo Alto Targets Legacy Infrastructure
Arora said Palo Alto has spoken with roughly 2,000 companies about its Frontier AI Critical Defense Program, an initiative designed to use advanced AI models to test corporate defenses, uncover vulnerabilities and help organizations modernize their security architecture.
Palo Alto formally introduced the programme in August.
The initiative is aimed at a growing problem for corporate IT departments: many security systems were designed around threats that moved at human or network speeds, while AI-enabled attacks can potentially scan environments, identify weaknesses and attempt exploitation almost instantaneously. That creates a widening gap between the speed at which an organization can detect and respond to a threat and the speed at which an automated attacker can exploit it.
For companies deploying AI agents that can access internal systems, customer information, financial data, or business applications, the stakes are even higher. A security failure could potentially give an autonomous system a pathway into sensitive corporate infrastructure, turning AI adoption itself into a new attack surface.
Opportunity Will Take Years to Materialize
Arora cautioned that the projected $1 trillion opportunity should not be interpreted as an immediate spending surge.
“Not everything’s going to happen next quarter,” he told Cramer. “But all I say is this changes the long-term growth rate and duration of cybersecurity, not just for Palo Alto, but as an industry.”
The opportunity will likely emerge through years of replacing legacy systems, deploying AI-specific security controls, and integrating cybersecurity into new AI infrastructure rather than through a single wave of spending. It also suggests that cybersecurity could become a prerequisite for enterprise AI deployment rather than a separate IT expense.
As companies increasingly use AI agents capable of taking actions without constant human supervision, security architecture will have to evolve from simply protecting users and devices to controlling what autonomous systems can access, execute, and modify.
Palo Alto’s strong results and outlook indicate that investors are beginning to price in that structural shift. The company’s central thesis is that AI may not be the technology that displaces cybersecurity; instead, it could be the technology that makes a much larger cybersecurity investment unavoidable.
