Palo Alto Networks has announced a significant agreement to acquire Chronosphere for $3.35 billion, a move that underscores the growing importance of observability in the era of artificial intelligence. This acquisition is aimed at boosting Palo Alto Networks’ capabilities to support enterprises that rely on unified data, security, and real-time operational resilience as their AI workloads expand in today’s increasingly digital landscape.
The integration of Chronosphere’s advanced observability architecture with Palo Alto Networks’ Cortex AgentiX platform is set to revolutionize the monitoring landscape. Chronosphere’s solutions, tailored for the extensive data requirements of the cloud and AI environments, are engineered for continuous uptime, efficiency, and reliability. Its technology, currently utilized by major AI-native companies, including two of the leading large language models, focuses on ensuring optimal performance in complex cloud applications.
By combining the extensive telemetry managed by Chronosphere with the autonomous capabilities of AgentiX, Palo Alto Networks intends to elevate observability from conventional monitoring practices to a modern framework capable of real-time autonomous remediation. This innovative approach will empower AI agents to proactively identify performance issues, analyze root causes, and automatically implement corrective measures, delivering organizations enhanced visibility across observability and security data at a massive scale while also improving cost-effectiveness through Chronosphere’s optimized data ingestion methods.
Recently recognized as a Leader in the 2025 Gartner Magic Quadrant for Observability Platforms, Chronosphere will also enhance Palo Alto Networks with advanced capabilities for telemetry pipelines that will facilitate efficient data transformation and routing. These advancements are expected to make large-scale data ingestion more financially viable for organizations as observability demands continue to grow.
As of September 2025, Chronosphere reported annual recurring revenue exceeding $160 million, showcasing impressive triple-digit year-over-year growth. The acquisition will be financed through cash and replacement equity awards, with an anticipated closing in the latter half of Palo Alto Networks’ fiscal 2026, subject to regulatory approvals and standard closing conditions.
Nikesh Arora, Chairman and CEO of Palo Alto Networks, expressed enthusiasm about the acquisition, stating, “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.” He emphasized that Chronosphere was designed to meet the unique data demands of the AI era.
Martin Mao, Co-Founder and CEO of Chronosphere, conveyed excitement for the partnership, noting, “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.” This collaboration is aimed at tackling the most intricate data and resilience challenges in the industry, further solidifying their commitment to serving industry-leading cloud and AI-native customers globally.
This acquisition not only marks a major step forward for Palo Alto Networks in the AI and cloud space but also showcases a commitment to providing robust solutions that can meet the evolving demands of enterprises navigating the complexities of modern digital environments.