SAN FRANCISCO, Dec 19 (Reuters) - Alphabet's GOOGL.O cloud computing unit and cybersecurity company Palo Alto Networks PANW.O on Friday announced an expanded partnership that one source told Reuters was by far Google Cloud's largest security services deal.
Palo Alto shares rose 2% on the news.
The contract comprises a commitment by Palo Alto to pay a sum "approaching $10 billion" to Google Cloud over several years, according to the person with direct knowledge of the matter.
Executives at both companies declined to comment on the specific figures of the contract. Some of the spending will go into migrating Palo Alto's existing offerings to Google's platform, but a sizable portion will go into adding new services that involve artificial intelligence, Palo Alto president BJ Jenkins told Reuters.
"AI has spawned a tremendous amount of demand for security," said Matt Renner, chief revenue officer for Google Cloud.
But while some business functions like software development have been fundamentally altered by AI, cybersecurity remains in its nascency.
"This is the same as when the cloud began to emerge and there were new security threats that no one had ever imagined," Jenkins said.
Cyberattacks are increasingly being perpetrated by the same generative AI tools that security providers are using to strengthen defenses.
Both Google and Palo Alto have invested heavily into security software as enterprises seek to adopt AI.
Google's $32 billion acquisition of security firm Wiz is pending regulatory approval. Palo Alto launched AI-driven offerings in October and announced plans to buy software company Chronosphere for $3.35 billion last month.
Renner said the new deal is the latest showcase of Google Cloud's advantageous positioning as AI reshapes the competitive landscape against hyperscaler rivals Amazon AMZN.O and Microsoft MSFT.O.
The two companies have been strategic partners since 2018. Palo Alto CEO Nikesh Arora was a longtime Google executive, serving as its chief business officer until 2014.
