IBM and Palo Alto Networks are joining forces on AI, as cybersecurity threats get tougher

By Bill Peters

'The expanding and complex enterprise technology landscape, driven by digital transformation and the rapid growth of AI, presents significant cybersecurity challenges,' companies say

International Business Machines Corp. and cybersecurity firm Palo Alto Networks on Wednesday announced an expansive partnership under which both companies will work together to offer security services powered by artificial intelligence, amid growing sophistication in online data breaches.

Under the deal, Palo Alto Networks (PANW) will become IBM's "preferred cybersecurity partner." Palo Alto will integrate IBM's Watsonx large language models into its AI-backed services.

IBM (IBM) will also train more than 1,000 of its security consultants on using the cybersecurity company's technology. The two companies will also set up a joint center for security operations.

"The expanding and complex enterprise-technology landscape, driven by digital transformation and the rapid growth of AI, presents significant cybersecurity challenges," the companies said in a statement. "To address increasingly sophisticated threats and evolving attack surfaces, organizations are prioritizing comprehensive security platforms that are underpinned by AI."

"Palo Alto Networks and IBM aim to help streamline and transform security operations, stop threats at scale and accelerate incident remediation for their customers with the complete AI-powered approach that is required," that statement continued.

Shares of IBM rose 0.3% after hours on Wednesday. Palo Alto Networks' stock rose 1.2%.

The partnership between the two arrives as IBM faces questions about its sales trends, which came up short of analysts' estimates during its most recent quarter. The company also faces wobblier trends in its consulting business. Still, shares are up 36% over the past 12 months.

Shares of Palo Alto Network have climbed 63% over that period. Palo Alto is trying to function more as a platform, where tech professionals could use more of its products that would work more effectively with each other. But the company suggested that shift might not be easy for customers.

-Bill Peters

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05-15-24 1729ET

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