Four months ago, cybersecurity stocks crashed on AI fears

In February, Anthropic launched Claude Code Security. CrowdStrike, Datadog and Zscaler fell >10%.

The fear: frontier AI would automate vulnerability scanning and pen testing, making security platforms obsolete.

Then the same AI lab partnered with them

On April 7, Anthropic announced Mythos but refused to release it publicly.

Instead, Anthropic created Project Glasswing — giving a small group of security vendors early access to Mythos for defensive use.

Palo Alto was among the first partners. PANW stock surged 60% from that day.

Q3 shows how PANW turned this into a GTM engine

Arora:

“Leveraging our strategic partnerships with leading frontier labs, we utilize early access to their most advanced models to complete the equivalent of a year’s worth of pen testing in less than three weeks.”

That work created Unit 42 Frontier AI Defense — a new product that generated 1,200+ customer inquiries and 800 enterprise meetings in six weeks.

Those meetings aren’t staying in one product silo.

Arora confirmed they’re “driving conversations across the platform,” pulling demand into agentic endpoint security and broader platform deals.

AI labs aren’t just partners — they’re becoming major buyers

PANW crossed $200M+ in ARR with a single frontier AI lab for Chronosphere — their observability platform that monitors AI training and inference clusters at scale. Two of the top five frontier labs now run on it.

Arora:

“We surpassed $200 million in ARR with a leading frontier AI lab. We expect that to continue to grow next quarter.”

Prisma AIRS — PANW’s platform for securing AI applications and agents in production — tripled its customer base in one quarter (100 - 300+), with visibility toward $100M ARR. This product didn’t exist a year ago.

AI fears keep proving exaggerated

AI didn’t shrink cybersecurity’s addressable market. It expanded it — new threat surfaces, new traffic volumes, new identity complexity, and entirely new buyer categories that didn’t exist 18 months ago.

Yet again, the feared disruption became a growth catalyst. We will likely see the same pattern across enterprise software. AI will generate more ecosystem opportunities, not less.

For alliance leaders:

• Study PANW’s playbook: partnership and co-innovation with a frontier lab - new product - 800 enterprise meetings - cross-platform pipeline. That partnership-to-GTM flywheel is replicable.

• The “disruptor” can become both a partner and a buyer. Look for that dynamic in your own category.

• AI capability shifts are expanding enterprise software TAM. Build your alliance strategy around where AI is growing your market.

How are you using AI to expand demand in your category?