Palo Alto Networks Founder Nir Zuk Launches Cylake with $45M to Build On-Premise AI Security Hardware

Nir Zuk, the founder and former long-time CTO of Palo Alto Networks, is launching a new cybersecurity venture named Cylake. After more than 25 years of building Palo Alto Networks into a $125 billion security giant, Zuk is once again taking a contrarian approach to the market. While the industry has largely shifted toward cloud-based solutions, Zuk's new startup focuses on developing AI-powered, hardware-based security systems designed for governments, defense contractors, and other highly regulated entities that cannot move sensitive data off-premises. The company has secured $45 million in funding from Greylock, the same venture capital firm that supported Palo Alto Networks in its early stages. Zuk estimates that approximately one-third of the market remains underserved by the current cloud-first model. He argues that the industry has overrotated toward cloud delivery, leaving critical customers behind with legacy infrastructure that cannot be migrated to public clouds. This move draws parallels to 2005, when Zuk founded Palo Alto Networks. At that time, skeptics claimed no one would consume cybersecurity services via the cloud. Today, he faces similar skepticism, with critics questioning the viability of launching a hardware-focused company in 2026. Despite the prevailing trend, Zuk remains confident in his strategy, stating that he enjoys challenging the status quo because he believes the opportunity is substantial. The cybersecurity sector is currently experiencing a surge in investment, with startups raising nearly $14 billion in 2025, a 47% increase from the previous year. This boom comes amid escalating threats driven by AI-powered bad actors and geopolitical tensions, such as the ongoing conflict in Iran. Zuk, now 54 and a billionaire, emphasized that his motivation is not financial gain but the desire to build innovative solutions. He noted that he felt his work at Palo Alto Networks was complete following the company's $25 billion acquisition of CyberArk, an identity security platform. Joining Zuk as co-founders are Wilson Xu, who previously led the engineering team at Palo Alto Networks, and Udi Shamir, who co-founded SentinelOne. Asheem Chandna, a partner at Greylock and long-time colleague of Zuk, described the new venture as a potential hundred-billion-dollar opportunity. Chandna highlighted that Zuk is a magnet for talent and a competitive, customer-centric technologist. According to Chandna, the bar for a successful second venture by a founder of such magnitude is incredibly high, and Cylake aims to address the critical needs of sovereign nations and regulated industries that require on-premises security. Zuk observed that while he has spent decades pitching cloud solutions, many customers expressed frustration that they could not utilize these products due to regulatory or operational constraints. He concluded that a company built entirely around cloud delivery cannot solve the specific needs of these on-premises environments. Consequently, he decided to launch Cylake to fill this gap, asserting that if he did not pursue this vision, no one else would.