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AI security

The attackers' side wins the market and the street already knows it: the one venture opening, autonomous offence, is priced above $1B with incumbents on the cap table.

  • Bear
  • Closing
  • $27B by 2035

The callThe bear case is more likely for a new company, because the published growth is above my own call and the only open slot is already priced above $1B. The market still goes from $2.8B to $26.6B, mostly to the incumbents.

D1D2R1R2R3C1foragainst D1D2R1R2R3C1foragainst
Fig. 1The balance. Drivers and catalysts against restraints, each block sized by its weight; catalysts hang dashed because they have not happened yet, sized by their odds. It tips toward the restraints.
  1. D1Attackers have AI: AI-written phishing rose 14x in late 2025 and time from disclosure to exploit fell from over 700 days to 44, so defence must run at machine speed.
  2. D2The EU Cyber Resilience Act makes every maker of digital products fund vulnerability handling and reporting, which continuous attack tools produce.
  3. R1The incumbents keep the telemetry and shipped agentic security operations in 2025, pulling the new revenue to themselves.
  4. R2The one opening is already priced: XBOW raised a $120M Series C above $1B with SentinelOne and NVIDIA as strategic holders.
  5. R32025 breaches were not mainly AI-driven, so the new budget may be relabelled old budget.
  6. C1The Cyber Resilience Act's full vulnerability-handling obligations apply across the EU, forcing product makers to buy continuous security evidence.Dec 2027
Rests onthe beliefs underneath
Supported by · confidence
Threatened by · confidence
What would prove itdated tests, open and resolved
20272028today1234predictionswatch 20272028today1234predictionswatch
Fig. 2Each ring is a dated test: dashed while open, struck through when overdue, ticked or crossed once resolved.
  1. 1An autonomous offence company passes $25M of ARR.Mar 2027 · open
  2. 2By end-2027 breach frequency/severity rises materially AND autonomous-security spend compounds >20%, driven by AI-native offense.Dec 2027 · open
  3. 3Breach frequency rises and autonomous security spend grows faster than 20%; flat breaches mean the incumbents keep it.Dec 2027 · open
  4. 4The Cyber Resilience Act's full obligations apply; whether they create new budget or relabel old.Dec 2027 · open
Expressionslisted, private, technologies
  • CRWDCrowdStrike
    • expensive
     Endpoint detection — Falcon platform.
  • PANWPalo Alto Networks
    • full
     Platform play: firewall + SASE + SOC.
  • SSentinelOne
    • expensive
  • ZSZscaler
    • full
     Zero-trust network — proxy-based SSE.
  • MSFTMicrosoft
    • full
     Sells AI threat protection for generative AI apps and agents on Azure (Defender for AI Services, Prompt Shields) to Azure customers.
  • CSCOCisco
    • not screened
     Sells AI Defense for model validation, runtime guardrails and AI access control, built on its 2024 Robust Intelligence acquisition.
  • CHKPCheck Point Software
    • not screened
     Sells AI application, agent runtime and workforce AI security plus AI red teaming, built on Lakera (acquired 2025).
  • FFIVF5
    • not screened
     Sells AI guardrails, AI red teaming and an AI gateway for models, apps and agents, built on CalypsoAI (acquired 2025).
Private · 12 private companies, 6 of them in Israel.

Sweet Security · Oligo Security · Elemendar · HiddenLayer · Noma Security · Straiker · Zenity · Mindgard · Pillar Security · Protect AI · Lakera · Prompt Security

Technologies
Who has already bet on itprivate rounds, from public sources

$637M raised by 10 companies, $474M of it in the last three years. Wave under way: Large rounds in the last three years; the category is funded and getting crowded.

Backed by a top-tier venture firm: Oligo Security, Straiker, Lakera, Mindgard. Backed by a strategic investor: Protect AI, HiddenLayer, Zenity.

2 more funded companies in the market.

What changedthe record, newest first
  • 23 Oct 2026One person, a free AI agent tool and about $5,000 of tokens broke into more than 100 companies. The cost of an intrusion is now a rounding error, which is the whole argument for spending on defence, and for the incumbents who sell it.
  • 23 Oct 2026The models found the bugs. Nobody can fix them fast enough: 516 of 6,157 patched. The race is lost for the long tail of unmaintained software and winnable at the top, and the product that matters now is the one that writes and ships the patch.
  • 26 Jul 2026I was betting slower growth than the street while presenting it as the contrarian call.