Palo Alto Networks is in talks to buy AI-agent security startup Clutch for $500 million

Palo Alto Networks is in talks to acquire Clutch Security, a three-year-old startup that secures AI agents' access to company systems, for $500 million in cash plus milestone-based payouts, according to a person familiar with the discussions. No agreement has been signed, and neither company responded to requests for comment. Clutch focuses on the non-human identities, such as API keys, tokens and service accounts, that agents use to reach corporate systems.

Clutch was valued at $85 million when it raised a $20 million Series A round in January 2025, led by Lightspeed and SignalFire, and it is approaching $10 million in annual recurring revenue, which would put the price at about 50 times that figure. A completed deal would be the Santa Clara cybersecurity company's seventh acquisition this year, according to PitchBook. Earlier purchases include Console, which uses AI agents to automate IT help desk tasks, for $500 million; Embrace for $325 million; Chronosphere for $2.95 billion; and Koi for $231 million.

Rivals have been buying in the same niche. Cyera acquired Oasis Security, which also manages AI agents' access to systems, for $1 billion, and Cisco bought Astrix for roughly $400 million. High prices reflect demand for tools that protect software as attackers use AI to break into systems more easily.