Palo Alto Networks: $3.35 Billion Acquisition Of Chronosphere To Advance AI Era Observability
Palo Alto Networks has unveiled a landmark plan to acquire Chronosphere for $3.35 billion, marking one of the most significant observability deals of the AI era. The company said the acquisition will enhance its ability to serve enterprises that increasingly depend on unified data, security, and real-time operational resilience as artificial intelligence workloads scale across global digital environments.
The acquisition will integrate Chronosphere’s next-generation observability architecture with Palo Alto Networks’ Cortex AgentiX platform. Chronosphere’s system, built specifically for the massive data demands of the cloud and AI era, is designed for continuous uptime, cost efficiency, and reliability. Already used in production by major AI-native companies including 2 of the premier large language models, Chronosphere’s technology aims to help enterprises ensure continuous performance across complex cloud applications.
By pairing the expansive telemetry handled by Chronosphere with the autonomous AI agent capabilities of AgentiX, Palo Alto Networks plans to shift observability from a traditional monitoring model to a system capable of real-time autonomous remediation. The company said the joint solution will enable AI agents to detect performance issues, identify root causes, and automatically take corrective actions. This is expected to offer organizations deeper visibility across observability and security data at a petabyte scale while delivering improved cost efficiencies through Chronosphere’s optimized data ingestion architecture.
Chronosphere, recently named a Leader in the 2025 Gartner Magic Quadrant for Observability Platforms, will also contribute advanced telemetry pipeline capabilities that enable powerful data transformation and routing. Palo Alto Networks said these capabilities will help customers make large-scale data ingestion financially viable as observability demands continue to increase.
Chronosphere reported annual recurring revenue above $160 million as of September 2025, with triple-digit year-over-year ARR growth. The acquisition will be financed through cash and replacement equity awards and is expected to close in the second half of Palo Alto Networks’ fiscal 2026, pending regulatory approval and customary closing conditions.
KEY QUOTES
“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.”
Nikesh Arora, Chairman And CEO, Palo Alto Networks
“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.”
Martin Mao, Co-Founder And CEO, Chronosphere
