Palo Alto Networks has entered into a definitive agreement to acquire Chronosphere, a next-generation observability platform built to scale for the AI era. This acquisition will strengthen Palo Alto Networks’ ability to help organizations navigate a world where modern applications and AI workloads demand a unified data and security foundation.
The growth of these applications and workloads requires constant uptime and resilience, making real-time, always-on observability mission-critical for success. Chronosphere was built precisely for these current needs: a next-generation architecture designed to scale for the AI era and handle vast cloud data volumes with cost-efficiency and reliability at the forefront. It has already proven its reliability and cost-efficiency in production with some of the category-defining companies leading the AI revolution, including two of the premier LLMs.
The strategic rationale behind the multi-billion dollar deal is to combine Chronosphere’s data processing with Cortex AgentiX, Palo Alto Networks’ AI platform.
“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,” said Nikesh Arora, Chairman and CEO, Palo Alto Networks. “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. “
Combining Chronosphere’s purpose-built, optimized architecture that can handle some of the largest and most complex digital environments with Palo Alto Networks’ AgentiX will transform the value proposition of observability from passive monitoring, to offering a ground-breaking autonomous remediation platform. The new solution will deploy AI agents on the massive amounts of data monitored by Chronosphere’s platform to not only detect performance issues, but also to autonomously investigate the root cause, and close the loop with agentic remediation. Customers will be able to achieve deeper visibility across both security and observability data at petabyte scale, while simultaneously realizing significant cost efficiencies due to Chronosphere’s optimized data ingestion architecture.
Chronosphere has experienced significant growth in recent years. At the end of September 2025, the company reported annual recurring revenue (ARR) of over $160 million. Analyst firm Gartner recently recognized the company as a leader in its 2025 Magic Quadrant for Observability Platforms.
Martin Mao, Co-founder and CEO, Chronosphere, said “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.”
Palo Alto Networks will pay the $3.35 billion acquisition price, to be paid in cash and replacement equity awards, subject to adjustments. The transaction is subject to regulatory approvals and is expected to close in Palo Alto Networks’ second half of fiscal 2026.
