Monday, December 22, 2025
Palo Alto Networks, the global cybersecurity powerhouse, has taken another major step toward supporting the growing data demands of the AI-driven world. The company announced that it has signed a definitive agreement to acquire Chronosphere, a next-generation observability platform designed specifically to scale with the massive workloads of the AI era. This strategic acquisition reinforces Palo Alto Networks’ commitment to providing organizations with a unified and secure data foundation as modern applications and AI systems expand at unprecedented speed.
As businesses increasingly rely on cloud-native applications and AI workloads, the need for uninterrupted uptime and operational resilience has become non-negotiable. Real-time observability especially at scale plays a crucial role in ensuring system reliability and performance. Chronosphere was engineered for exactly these challenges. Built with a next-generation architecture, the platform can process enormous volumes of cloud data while maintaining reliability and cost efficiency. Its proven performance is evident, as it currently supports several category-defining AI innovators, including two leading large language model providers.
With Chronosphere’s advanced observability capabilities integrated into Palo Alto Networks’ AgentiX™ platform, the combined solution will dramatically shift the observability landscape. Instead of serving as a passive monitoring system, this new model will introduce autonomous, AI-driven remediation. By deploying intelligent agents across Chronosphere’s extensive data pipelines, the solution will not only detect performance issues but also analyze root causes and resolve them automatically. This means organizations will gain significantly deeper visibility across security and observability data at petabyte scale while reducing operational costs thanks to Chronosphere’s optimized ingestion architecture.
Chronosphere, recently recognized as a Leader in the 2025 Gartner® Magic Quadrant™ for Observability Platforms, brings strong telemetry pipeline capabilities that will enhance the data transformation, optimization, and routing features within Palo Alto Networks’ ecosystem. This will help customers make large-scale data ingestion both more efficient and more financially viable.
Under the agreement, Palo Alto Networks will acquire Chronosphere for $3.35 billion, paid through cash and replacement equity awards, subject to standard adjustments. Chronosphere currently reports annual recurring revenue (ARR) exceeding $160 million, with triple-digit year-over-year growth as of September 2025. The acquisition is pending regulatory reviews and is expected to close in the second half of Palo Alto Networks’ fiscal 2026.
Nikesh Arora, Chairman and CEO of Palo Alto Networks, emphasized the importance of this deal:
“The foundational requirement for every modern AI data center is constant uptime and resilience, which demands real-time, always-on observability delivered at the right cost. Chronosphere was built to scale for the data demands of the AI era from day one, which is why it is chosen by leading AI-native and born-in-the-cloud organizations. And once we leverage AgentiX with Chronosphere, we will take observability from simple dashboards to real-time, agentic remediation. We are excited to not just enter this space, but to disrupt it.”
Chronosphere’s Co-founder and CEO, Martin Mao, added:
“We founded Chronosphere to provide scalable resiliency for the world's largest digital organizations. Palo Alto Networks is the perfect strategic partner for our customers, partners, and employees. It allows us to combine our disruptive observability platform with the world's best security company, accelerating our momentum in solving the most complex data and resiliency challenges. Together, we look forward to continuing to partner with industry-leading cloud and AI-native customers across the world on their mission-critical observability and security needs.”
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