Palo Alto CEO Warns AI Is Making Aging Defenses Obsolete, Putting $1 Trillion In Infrastructure At Risk

Artificial intelligence is forcing companies to confront the massive cybersecurity problem of much of the technology protecting their systems was built before AI could operate at anything close to today’s speed.

Palo Alto Networks CEO Nikesh Arora said Tuesday that approximately $1 trillion worth of aging global cybersecurity infrastructure needs to be modernized as businesses and attackers increasingly embrace artificial intelligence.

“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.”

The warning comes as Palo Alto Networks sees growing demand tied to the rapid expansion of AI. The cybersecurity company beat fiscal fourth-quarter estimates Tuesday and provided a strong outlook for its new fiscal year.

Arora argues that AI is changing cybersecurity on both sides of the equation. Companies are racing to deploy the technology, while attackers can use increasingly powerful AI tools to identify and exploit vulnerabilities much faster than before. “You cannot deploy AI successfully if you don’t get cybersecurity right,” Arora said.

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.

The argument represents a significant shift from the way investors viewed the relationship between AI and cybersecurity earlier this year. Palo Alto and other cybersecurity stocks initially came under pressure as investors worried that increasingly capable AI models could disrupt traditional cybersecurity software.

As the technology developed, however, the market began to consider the possibility that AI could make cybersecurity even more important because attackers have access to the same increasingly sophisticated tools.

Arora joked about how dramatically the narrative has changed. “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.”

Arora pointed to the emergence of Anthropic’s Mythos model earlier this year as a turning point because of its ability to be used to exploit software vulnerabilities. Its arrival, he said, pushed companies to take the cybersecurity implications of advanced AI more seriously.

Palo Alto shares have surged 113% since April 7, according to the CNBC report. Before that point, the stock had been in negative territory for 2026. “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 is now attempting to capitalize on that urgency through its Frontier AI Critical Defense Program, which the company introduced in May. Arora said Palo Alto has held conversations with roughly 2,000 companies about the program. It uses advanced AI models to test customers’ defenses, uncover vulnerabilities and help companies modernize their cybersecurity infrastructure.

Still, the CEO cautioned against expecting the estimated $1 trillion modernization opportunity to translate into spending immediately. “Not everything’s going to happen next quarter,” Arora told Cramer.

Instead, Arora sees AI changing the industry’s trajectory over a much longer period. As artificial intelligence becomes more deeply embedded in corporate technology and automated threats become faster, companies will have to reconsider security systems that were never designed for that environment.

For Palo Alto, that could extend the cybersecurity industry’s growth opportunity well beyond the current AI investment boom. “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,” Arora said.