Palo Alto Networks Inc. on Wednesday said it will acquire CyberArk Software Inc. for about $25 billion, in its biggest deal yet.

The cash-and-stock deal, expected to close in fiscal 2026, underscores an industry-wide frenzy to create comprehensive cybersecurity solutions to tap into and corral skyrocketing artificial intelligence (AI)-driven demand. The addition of CyberArk should broaden Palo Alto’s cybersecurity offerings through identity security tools that are largely appealing to enterprise customers. Among CyberArk’s large customers are Carnival Corp., Panasonic, and Aflac.

“The rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls,” Palo Alto Networks CEO Nikesh Arora said in a statement.

A surge in data breaches and ransomware propelled by AI tools has increased urgency among larger tech companies for more robust cyber defenses and consequently increased interest in firms like CyberArk.