Cisco's Splunk Deal Highlights Growing Interest In The Intersection … – Crunchbase News

Cisco Systems has never been shy about M&A and it proved it again in a big way Thursday when it agreed to buy Splunk in a deal valued at about $28 billion that furthers the hardware giant’s push into software.

The deal marks the biggest enterprise software deal of the year, beating Silver Lake taking Qualtrics private for $12.5 billion in March.

It also tops off what has been a big couple of weeks of investor interest in the role AI will play in cybersecurity and vice versa. Cisco’s interest in the San Francisco-based data and security giant is due in no small part to Splunk’s new detect-and-respond AI offerings announced earlier this year.

“Our combined capabilities will drive the next generation of AI-enabled security and observability,” Cisco chair and CEO Chuck Robbins said in a release. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

Not the only deal

While the Cisco deal is by far the most impactful, it also has been a busy couple of weeks for cyber AI in the private market too.

A quick rundown of some of the deals we saw in the space recently:

• Austin, Texas-based HiddenLayer, which defends companies’ AI models, raised a $50 million Series A led by Microsoft‘s venture arm M12 and Moore Strategic Ventures.
• New York-based Patronus AI, which evaluates and tests large language models, raised a $3 million seed round led by Lightspeed Venture Partners.
• Palo Alto, California-based Legit Security, which looks to secure application development from AI threats, raised a $40 million round led by CRV.
• Sunnyvale, California-based Discern Security, an AI-driven policy management cybersecurity startup, raised a $3 million seed round from BoldCap, Cyber Mentor Fund and WestWave Capital.

AI’s impact

While cybersecurity funding to startups is down — just as funding is down in most sectors aside from generative AI — the interest in the crossover of security and AI is holding strong among investors.

Cybersecurity startups using AI or in the AI industry this year have raised nearly $1 billion in 70 deals to date, according Crunchbase data. That is just off last year’s pace of $1.4 billion in 122 deals — and last year was generally more robust in venture capital.

Some of that interest is due to the fact that both cybersecurity and AI can likely grow each others’ markets. Security will be needed to protect the data LLMs use in the AI process, as well as for creating the guardrails for what information is used and how companies employ AI modeling.

On the flip side, AI can be used in cybersecurity in a variety of features, such as detection, remediation and automation. Cybersecurity also has always been an early adopter of other technologies to help enhance all defenses, so it is not surprising many security startups are utilizing AI.

Several months ago, AI was one of the main talking points at the RSA Conference in San Francisco (we wrote about it here), and the last week-plus shows that has not changed.

With one of the largest tech companies in the world now dropping tens of billions of dollars into the market, expect more big weeks of AI cybersecurity ahead.

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Illustration: Dom Guzman