Palo Alto Networks to acquire Chronosphere in $3.35bn deal

Palo Alto Networks has entered into a definitive agreement to acquire next-gen observability platform, Chronosphere, for $3.35 billion.

The deal is expected to close in the second half of the cyber security firm’s fiscal 2026, subject to customary closing conditions and regulatory approvals.

Palo Alto said the move will enable it to deliver next-generation observability capabilities for modern applications and AI workloads that require constant uptime and resilience.

Established in 2019, Chronosphere’s platform is designed to deliver always-on observability, built on architecture capable of scaling for the AI era and tackling large cloud data volumes.

Post-acquisition, the platform will be paired with Palo Alto’s Cortex AgentiX to create an autonomous remediation solution that expands beyond passive monitoring.

“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,” said Nikesh Arora, Palo Alto chairman and CEO, in an announcement.

“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."

Agentic remediation

Chronosphere will bring telemetry pipeline capabilities to Palo Alto’s platforms to help drive customers’ data transformation and make large-scale data ingestion economically viable at scale.

The new, combined solution will deploy AI agents on the large amounts of data monitored by Chronosphere’s platform to autonomously investigate the root cause of performance issues and close the loop through agentic remediation.

Customers stand to benefit from deeper visibility across both security and observability data at petabyte scale, Palo Alto said, as well as "significant cost efficiencies” thanks to Chronosphere’s optimized data ingestion architecture.

‘Perfect strategic partner’

For Chronosphere, the deal follows a period of strong growth, having reported annual recurring revenue (ARR) of $160 million as of the end of September 2025, representing triple-digit growth year-over-year.

Commenting on the company’s acquisition, Martin Mao, Chronosphere’s cofounder and CEO, described Palo Alto as “the perfect strategic partner” for its 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,” he said.

“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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