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Posts tagged ‘enterprise security’

Apr 8

Top 10 security categories where VC funding trails Gartner’s 2026 growth forecast, Crunchbase data

Top 10 security categories where VC funding trails Gartner’s 2026 growth forecast, Crunchbase data

Two of Gartner’s 10 fastest-growing security categories have zero venture-backed startups. Firewall equipment, a $26.7 billion market by 2030, and pure-play cloud access security brokers, projected at $7.1 billion, are controlled entirely by incumbent vendors. No startup has raised a dollar in either category since January 2025.

I cross-referenced Gartner’s 1Q26 Information Security forecast against CB Insights, Crunchbase, and PitchBook funding data for every one of the 10 fastest-growing security categories. The question: where is venture capital following Gartner’s growth signal, and where is it missing?

The answer is stark. $93.2 billion in projected 2030 spending across these 10 categories. $11.2 billion in total VC raised by 59 funded startups. That is an 8.3:1 gap between where enterprise demand is heading and where startup capital is flowing. In 5 of 10 categories, the gap exceeds 12:1. As I detailed in last week’s analysis of the 10 fastest-growing categories, growth is concentrating in cloud infrastructure, proactive intelligence, and privacy compliance. The VC data tells you whether anyone is building what CISOs need to buy.

“Cybersecurity leaders are navigating uncharted territory this year as these forces converge, testing the limits of their teams in an environment defined by constant change,” said Alex Michaels, Director at Gartner. The spending data confirms it. The startup funding data shows the supply side has not caught up.

Two of Gartner’s 10 fastest-growing security categories have zero venture-backed startups. Firewall equipment, a $26.7 billion market by 2030, and pure-play cloud access security brokers, projected at $7.1 billion, are controlled entirely by incumbent vendors. No startup has raised a dollar in either category since January 2025. I cross-referenced Gartner’s 1Q26 Information Security forecast against CB Insights, Crunchbase, and PitchBook funding data for every one of the 10 fastest-growing security categories. The question: where is venture capital following Gartner’s growth signal, and where is it missing? The answer is stark. $93.2 billion in projected 2030 spending across these 10 categories. $11.2 billion in total VC raised by 59 funded startups. That is an 8.3:1 gap between where enterprise demand is heading and where startup capital is flowing. In 5 of 10 categories, the gap exceeds 12:1. As I detailed in last week’s analysis of the 10 fastest-growing categories, growth is concentrating in cloud infrastructure, proactive intelligence, and privacy compliance. The VC data tells you whether anyone is building what CISOs need to buy. “Cybersecurity leaders are navigating uncharted territory this year as these forces converge, testing the limits of their teams in an environment defined by constant change,” said Alex Michaels, Director at Gartner. The spending data confirms it. The startup funding data shows the supply side has not caught up. ▼ GRAPHIC: GRAPHIC 2 — Paired bar chart: Gartner 2030 projection vs. VC raised (insert before master table) ▼ Figure 2: Gartner 2030 projections (dark) vs. total VC raised (light) for each of the 10 categories. The master table: Gartner forecast vs. startup funding by category I mapped each Gartner category against every cybersecurity startup that raised equity or debt since January 2025. Each company is assigned to one primary category to avoid double-counting. Gap Ratio is the Gartner 2030 market projection divided by total VC raised. Higher means wider gap. # Gartner Security Category 2025-26 GR 5yr CAGR 2030 Proj Startups Total VC Gap Ratio Verdict 1 Cloud Access Security Brokers (CASB) 27.2% 24.3% $7.1B 4 $182M 39:1 Critical Gap 2 Firewall Equipment (NGFW/FWaaS) 15.9% 9.1% $26.7B 0 $0 ∞ Incumbent Lock 3 Cloud Security Posture Mgmt (CSPM) 33.4% 27.6% $16.2B 6 $752M 21.5:1 Underfunded 4 Vulnerability Assessment 15.7% 12.0% $6.4B 6 $306M 20.9:1 Underfunded 5 Cloud Workload Protection (CWPP) 25.9% 21.0% $16.1B 8 $1.28B 12.6:1 Underfunded 6 Subject Rights Request Automation 16.2% 12.3% $2.3B 2 $240M 9.6:1 M&A Absorbed 7 Network Detection & Response (NDR) 15.6% 12.4% $4.1B 4 $701M 5.9:1 Moderate Gap 8 Zero Trust Network Access (ZTNA) 23.0% 20.9% $6.4B 10 $1.94B 3.3:1 VC Ahead 9 Threat Intelligence 27.3% 21.1% $6.9B 12 $3.16B 2.2:1 Oversupplied 10 Consent & Preference Mgmt 22.1% 18.6% $2.0B 7 $2.61B 0.8:1 Oversupplied Source: Gartner 1Q26 Information Security Market Current Outlook (G00846158, March 2026). Growth rates in constant currency. Funding data from CB Insights, Crunchbase, PitchBook. Analysis by Software Strategies Blog, April 2026. The table splits cleanly into three tiers. Five categories are underfunded or locked out (Gap Ratio above 9:1). Two sit in the middle. Three are oversupplied or ahead of the Gartner signal. I update this comparison every quarter as Gartner releases new forecast data. Get the next one in your inbox. The 3 widest gaps Gap #1: CASB — 39:1, and the category is disappearing Gartner projects cloud access security brokers reaching $7.1 billion by 2030 at a 24.3% CAGR. Total startup funding since January 2025: $182 million across just 4 companies. Company Total Funding Last Round Lead Investor HQ Founded Reco $85M $30M Series B Zeev Ventures New York 2020 Seraphic Security $44M $29M Series A GreatPoint Ventures Palo Alto / Israel 2020 Nudge Security $35M $22.5M Series A Cerberus Ventures Austin, TX 2021 Spin.AI $18M+ Undisclosed (K1) K1 Investment Mgmt Palo Alto 2017 The gap is structural, not cyclical. Pure-play CASB startups no longer exist as a standalone category. The buying motion has shifted to SASE platforms. Cato Networks raised $409 million in a Series G in June 2025, but that money funds a unified SASE platform spanning CASB, ZTNA, and SD-WAN. For CISOs, the implication is direct. If your CASB requirement is standalone, your vendor options are Netskope, Skyhigh, Forcepoint, and a handful of sub-$50 million startups. Expect fewer competitive bids and less pricing leverage than in categories where VC is abundant. Gap #2: CSPM — 21.5:1, the fastest-growing category is still starved Cloud security posture management is the single fastest-growing category in Gartner’s entire information security forecast. 33.4% growth in 2026. $16.2 billion by 2030 at a 27.6% five-year CAGR. Total startup funding: $752 million across 6 companies. Company Total Funding Last Round Lead Investor HQ Founded Upwind Security $430M $250M Series B Bessemer Venture Partners San Francisco 2022 Noma Security $132M $100M Series B Evolution Equity Partners New York / Tel Aviv 2023 Sentra $100M+ $50M Series B Key1 Capital New York / Tel Aviv 2021 Native Security $42M $31M Series A Ballistic Ventures Tel Aviv / Seattle 2024 Mondoo $32.5M $17.5M Series A Ext HV Capital San Francisco 2020 AccuKnox $15M $4M Venture DreamIt Ventures Menlo Park 2020 Upwind alone accounts for 57% of all CSPM startup capital. It hit unicorn status at a $1.5 billion valuation in January 2026. But one company cannot fill a $16.2 billion market. Alphabet’s $32 billion acquisition of Wiz in March 2026 removed the largest independent cloud security company from the startup market entirely. In my analysis of $3.6 billion in agentic AI security funding, I tracked how M&A is filling gaps that VC has not. CSPM is a category where that pattern is accelerating. Gap #3: Vulnerability Assessment — 20.9:1, the most active seed-stage category Gartner projects vulnerability assessment at $6.4 billion by 2030. Total VC: $306 million across 6 companies. Company Total Funding Last Round Lead Investor HQ Founded Zafran Security $130M $60M Series C Menlo Ventures New York 2022 Seemplicity $82M+ $50M Series B Sienna Venture Capital Tel Aviv 2020 Cogent Security $53M $42M Series A Bain Capital Ventures San Francisco 2024 Nucleus Security $20M+ $20M Series C Undisclosed Tampa, FL 2018 Onit Security $11M $11M Seed Hetz Ventures Tel Aviv 2025 ZAST.AI ~$10M $6M Pre-A Hillhouse Capital Seattle 2024 ▼ GRAPHIC: GRAPHIC 3 — Top funded startups in underfunded categories (insert after Vuln Assess table) ▼ Figure 3: Total funding by startup across the three underfunded categories (CSPM, CWPP, Vulnerability Assessment). This is the category with the most active early-stage investment. Cogent Security and Onit Security both use AI agents for autonomous vulnerability remediation. Zafran tripled ARR since its prior round. The agentic AI thesis is landing hardest in vulnerability management, and the funding trail shows it. Balbix, which had raised $98.6 million, was acquired in November 2025. For CISOs evaluating this category, the vendor field is young and fragmented. Half of the funded companies were founded in 2024 or later. Where VC is ahead of Gartner Three categories show the opposite pattern. In Consent & Preference Management, OneTrust alone has raised $2.1 billion against a $2.0 billion Gartner projection. In Threat Intelligence, $3.16 billion in VC against a $6.9 billion projection, but Dataminr ($1.24B) and ReliaQuest ($1.13B) account for 75% of the total. In ZTNA, Cato Networks’ $1.1 billion alone represents 57% of all category funding. ▼ GRAPHIC: GRAPHIC 4 — Concentration risk donut charts (insert after VC-ahead section) ▼ Figure 4: Single-company concentration in CWPP, ZTNA, and Threat Intelligence funding. The concentration risk matters. Strip out the single largest company in each oversupplied category and the gap ratios invert. Consent without OneTrust: $510 million, Gap Ratio 3.9:1. Threat Intelligence without Dataminr and ReliaQuest: $790 million, Gap Ratio 8.7:1. ZTNA without Cato: $835 million, Gap Ratio 7.7:1. M&A is filling the gaps VC won’t When startups cannot fill the gap, platform vendors acquire. The $3.6 billion in agentic AI security funding and $96 billion in M&A I tracked in March tells this story at scale. Palo Alto Networks assembled $29 billion in acquisitions. ServiceNow spent $11.6 billion. Alphabet closed $32 billion for Wiz. Veeam acquired Securiti.ai for $1.725 billion, removing the leading subject rights automation vendor from the independent market. Forrester’s 2026 cybersecurity budget data confirms the same pattern from the buyer side. Security budgets are growing, but the spend is concentrating in fewer, larger platform purchases. What this means for CISOs In underfunded categories, build internally or accept platform vendor lock-in. CSPM, vulnerability assessment, and CWPP all have Gap Ratios above 12:1. Fewer funded startups means fewer competitive alternatives. If your preferred vendor gets acquired, as Wiz, Securiti.ai, and Balbix all were, your roadmap depends on the acquirer’s priorities, not yours. In oversupplied categories, use the competition for better pricing. ZTNA, threat intelligence, and consent management have abundant VC-backed alternatives. Negotiate harder. Run competitive evaluations with three or more vendors. The funding data tells you which categories give you leverage. Watch for single-company concentration. Chainguard holds 70% of all CWPP startup funding. Cato holds 57% of ZTNA. OneTrust holds 80% of consent management. If any of these companies pivots, gets acquired, or fails, the category funding picture changes overnight. Bottom line Gartner projects $93.2 billion in 2030 spending across the 10 fastest-growing security categories. Venture capital has funded $11.2 billion in startups since January 2025. The 8.3:1 blended gap tells you the overall story. The category-level ratios tell you where to act. Cloud security posture management, vulnerability assessment, and cloud workload protection are growing at 2x to 3x the market average but remain underfunded relative to Gartner’s projections. Two categories, firewall equipment and pure-play CASB, have no startup investment at all. Platform vendors are filling gaps through acquisition at a pace that is reshaping every competitive evaluation. This is the third quarter I have tracked Gartner’s security forecast against independent funding data. The gap between enterprise demand and startup supply keeps widening. Gartner’s 2Q26 forecast lands in July. I will break down the updated Gap Ratios the week it drops. I wrote a shorter editorial take on what these gaps mean for CISO budgets on my Substack. Source: Gartner, Information Security Market Current Outlook, Worldwide, 1Q26 (G00846158), March 2026. Growth rates in constant currency. Dollar figures in current U.S. dollars. Funding data from CB Insights, Crunchbase, PitchBook, Statista. Cross-referenced against company press releases. Analysis by Software Strategies Blog.

The master table: Gartner forecast vs. startup funding by category

I mapped each Gartner category against every cybersecurity startup that raised equity or debt since January 2025. Each company is assigned to one primary category to avoid double-counting. Gap Ratio is the Gartner 2030 market projection divided by total VC raised. Higher means wider gap.

# Gartner Security Category 2025-26 GR 5yr CAGR 2030 Proj Startups Total VC Gap Ratio Verdict
1 Cloud Access Security Brokers (CASB) 27.2% 24.3% $7.1B 4 $182M 39:1 Critical Gap
2 Firewall Equipment (NGFW/FWaaS) 15.9% 9.1% $26.7B 0 $0 ∞ Incumbent Lock
3 Cloud Security Posture Mgmt (CSPM) 33.4% 27.6% $16.2B 6 $752M 21.5:1 Underfunded
4 Vulnerability Assessment 15.7% 12.0% $6.4B 6 $306M 20.9:1 Underfunded
5 Cloud Workload Protection (CWPP) 25.9% 21.0% $16.1B 8 $1.28B 12.6:1 Underfunded
6 Subject Rights Request Automation 16.2% 12.3% $2.3B 2 $240M 9.6:1 M&A Absorbed
7 Network Detection & Response (NDR) 15.6% 12.4% $4.1B 4 $701M 5.9:1 Moderate Gap
8 Zero Trust Network Access (ZTNA) 23.0% 20.9% $6.4B 10 $1.94B 3.3:1 VC Ahead
9 Threat Intelligence 27.3% 21.1% $6.9B 12 $3.16B 2.2:1 Oversupplied
10 Consent & Preference Mgmt 22.1% 18.6% $2.0B 7 $2.61B 0.8:1 Oversupplied

Source: Gartner 1Q26 Information Security Market Current Outlook (G00846158, March 2026). Growth rates in constant currency. Funding data from CB Insights, Crunchbase, PitchBook. Analysis by Software Strategies Blog, April 2026.

The table splits cleanly into three tiers. Five categories are underfunded or locked out (Gap Ratio above 9:1). Two sit in the middle. Three are oversupplied or ahead of the Gartner signal.

I update this comparison every quarter as Gartner releases new forecast data. Get the next one in your inbox.

The 3 widest gaps

Gap #1: CASB — 39:1, and the category is disappearing

Gartner projects cloud access security brokers reaching $7.1 billion by 2030 at a 24.3% CAGR. Total startup funding since January 2025: $182 million across just 4 companies.

Company Total Funding Last Round Lead Investor HQ Founded
Reco $85M $30M Series B Zeev Ventures New York 2020
Seraphic Security $44M $29M Series A GreatPoint Ventures Palo Alto / Israel 2020
Nudge Security $35M $22.5M Series A Cerberus Ventures Austin, TX 2021
Spin.AI $18M+ Undisclosed (K1) K1 Investment Mgmt Palo Alto 2017

The gap is structural, not cyclical. Pure-play CASB startups no longer exist as a standalone category. The buying motion has shifted to SASE platforms. Cato Networks raised $409 million in a Series G in June 2025, but that money funds a unified SASE platform spanning CASB, ZTNA, and SD-WAN.

For CISOs, the implication is direct. If your CASB requirement is standalone, your vendor options are Netskope, Skyhigh, Forcepoint, and a handful of sub-$50 million startups. Expect fewer competitive bids and less pricing leverage than in categories where VC is abundant.

Gap #2: CSPM — 21.5:1, the fastest-growing category is still starved

Cloud security posture management is the single fastest-growing category in Gartner’s entire information security forecast. 33.4% growth in 2026. $16.2 billion by 2030 at a 27.6% five-year CAGR. Total startup funding: $752 million across 6 companies.

Company Total Funding Last Round Lead Investor HQ Founded
Upwind Security $430M $250M Series B Bessemer Venture Partners San Francisco 2022
Noma Security $132M $100M Series B Evolution Equity Partners New York / Tel Aviv 2023
Sentra $100M+ $50M Series B Key1 Capital New York / Tel Aviv 2021
Native Security $42M $31M Series A Ballistic Ventures Tel Aviv / Seattle 2024
Mondoo $32.5M $17.5M Series A Ext HV Capital San Francisco 2020
AccuKnox $15M $4M Venture DreamIt Ventures Menlo Park 2020

Upwind alone accounts for 57% of all CSPM startup capital. It hit unicorn status at a $1.5 billion valuation in January 2026. But one company cannot fill a $16.2 billion market.

Alphabet’s $32 billion acquisition of Wiz in March 2026 removed the largest independent cloud security company from the startup market entirely. In my analysis of $3.6 billion in agentic AI security funding, I tracked how M&A is filling gaps that VC has not. CSPM is a category where that pattern is accelerating.

Gap #3: Vulnerability Assessment — 20.9:1, the most active seed-stage category

Gartner projects vulnerability assessment at $6.4 billion by 2030. Total VC: $306 million across 6 companies.

Company Total Funding Last Round Lead Investor HQ Founded
Zafran Security $130M $60M Series C Menlo Ventures New York 2022
Seemplicity $82M+ $50M Series B Sienna Venture Capital Tel Aviv 2020
Cogent Security $53M $42M Series A Bain Capital Ventures San Francisco 2024
Nucleus Security $20M+ $20M Series C Undisclosed Tampa, FL 2018
Onit Security $11M $11M Seed Hetz Ventures Tel Aviv 2025
ZAST.AI ~$10M $6M Pre-A Hillhouse Capital Seattle 2024

 

This is the category with the most active early-stage investment. Cogent Security and Onit Security both use AI agents for autonomous vulnerability remediation. Zafran tripled ARR since its prior round. The agentic AI thesis is landing hardest in vulnerability management, and the funding trail shows it.

Balbix, which had raised $98.6 million, was acquired in November 2025. For CISOs evaluating this category, the vendor field is young and fragmented. Half of the funded companies were founded in 2024 or later.

Where VC is ahead of Gartner

Three categories show the opposite pattern. In Consent & Preference Management, OneTrust alone has raised $2.1 billion against a $2.0 billion Gartner projection. In Threat Intelligence, $3.16 billion in VC against a $6.9 billion projection, but Dataminr ($1.24B) and ReliaQuest ($1.13B) account for 75% of the total. In ZTNA, Cato Networks’ $1.1 billion alone represents 57% of all category funding.

The concentration risk matters. Strip out the single largest company in each oversupplied category and the gap ratios invert. Consent without OneTrust: $510 million, Gap Ratio 3.9:1. Threat Intelligence without Dataminr and ReliaQuest: $790 million, Gap Ratio 8.7:1. ZTNA without Cato: $835 million, Gap Ratio 7.7:1.

M&A is filling the gaps VC won’t

When startups cannot fill the gap, platform vendors acquire. The $3.6 billion in agentic AI security funding and $96 billion in M&A I tracked in March tells this story at scale. Palo Alto Networks assembled $29 billion in acquisitions. ServiceNow spent $11.6 billion. Alphabet closed $32 billion for Wiz. Veeam acquired Securiti.ai for $1.725 billion, removing the leading subject rights automation vendor from the independent market.

Forrester’s 2026 cybersecurity budget data confirms the same pattern from the buyer side. Security budgets are growing, but the spend is concentrating in fewer, larger platform purchases.

What this means for CISOs

In underfunded categories, build internally or accept platform vendor lock-in. CSPM, vulnerability assessment, and CWPP all have Gap Ratios above 12:1. Fewer funded startups means fewer competitive alternatives. If your preferred vendor gets acquired, as Wiz, Securiti.ai, and Balbix all were, your roadmap depends on the acquirer’s priorities, not yours.

In oversupplied categories, use the competition for better pricing. ZTNA, threat intelligence, and consent management have abundant VC-backed alternatives. Negotiate harder. Run competitive evaluations with three or more vendors. The funding data tells you which categories give you leverage.

Watch for single-company concentration. Chainguard holds 70% of all CWPP startup funding. Cato holds 57% of ZTNA. OneTrust holds 80% of consent management. If any of these companies pivots, gets acquired, or fails, the category funding picture changes overnight.

Bottom line

Gartner projects $93.2 billion in 2030 spending across the 10 fastest-growing security categories. Venture capital has funded $11.2 billion in startups since January 2025. The 8.3:1 blended gap tells you the overall story. The category-level ratios tell you where to act.

Cloud security posture management, vulnerability assessment, and cloud workload protection are growing at 2x to 3x the market average but remain underfunded relative to Gartner’s projections. Two categories, firewall equipment and pure-play CASB, have no startup investment at all. Platform vendors are filling gaps through acquisition at a pace that is reshaping every competitive evaluation.

This is the third quarter I have tracked Gartner’s security forecast against independent funding data. The gap between enterprise demand and startup supply keeps widening. Gartner’s 2Q26 forecast lands in July. I will break down the updated Gap Ratios the week it drops. I wrote a shorter editorial take on what these gaps mean for CISO budgets on my Substack.

Source: Gartner, Information Security Market Current Outlook, Worldwide, 1Q26 (G00846158), March 2026. Growth rates in constant currency. Dollar figures in current U.S. dollars. Funding data from CB Insights, Crunchbase, PitchBook, Statista. Cross-referenced against company press releases. Analysis by Software Strategies Blog.

 

Mar 28

$3.6 Billion in Crunchbase funding, $96 Billion in M&A, and 10 Agentic AI security startups Reshaping 2026

Palo Alto Networks spent $29 billion acquiring three companies. ServiceNow spent $11.6 billion on three more. Alphabet paid $32 billion for Wiz. The startups building agentic AI defenses raised $3.6 billion. Total MCP security funding for 17,000+ deployed servers: $40 million. Then RSAC 2026 happened.

Read more

Feb 26

Roundup of agentic AI forecasts and market estimates, 2026

Roundup of agentic AI forecasts and market estimates, 2026

Agentic AI spending is projected to reach $201.9 billion in 2026 (Gartner), overtaking chatbot spending by 2027.  Four independent firms size the standalone market at $7–8 billion with 40%+ CAGRs. But adoption lags the money: only 23% of organizations have scaled agent deployments (McKinsey), and 40% of projects face cancellation by 2027 (Gartner).

Fortune Business Insights projects $7.29 billion in 2025, reaching $139.19 billion by 2034 at 40.5% CAGR. Precedence Research sizes it at $7.55 billion in 2025, growing to $199.05 billion by 2034 at 43.84% CAGR. MarketsandMarkets puts the figure at $7.06 billion in 2025, reaching $93.20 billion by 2032 at 44.6% CAGR. Deloitte’s TMT Predictions 2025 estimates $8.5 billion in 2026, growing to $35 to $45 billion by 2030.

Every major forecast agrees on direction. None agrees on scale. The standalone agentic AI market lands between $7 billion and $8.5 billion. Gartner’s broader view, counting agentic capabilities embedded across enterprise software, reaches $201.9 billion in 2026. That 25x gap is not a contradiction. It is a measurement problem, and the takeaways below reflect both realities. The following are the key takeaways from agentic AI forecasts published in 2026 so far:

Key takeaways

Worldwide AI spending will reach $2.52 trillion in 2026, growing 44% year-over-year. That number jumped roughly $500 billion from the September forecast, which had pegged the market just above $2 trillion. Infrastructure takes $1.37 trillion, 54% of total spend. AI software follows at $452.5 billion, up 60%. AI services add $588.6 billion. AI-optimized servers alone account for $421.6 billion, growing to 49%. Gartner expects spending to grow by another 30% in 2027 and surpass $3 trillion. I have tracked these forecasts through multiple iterations. The revisions keep going in one direction. Source: Gartner press release, January 15, 2026

 

Gartner projects $4.71 trillion in global AI spending by 2029. The fastest growth isn’t in infrastructure. Synthetic data generation leads all categories at 178% CAGR, followed by the broader AI Data market at 155%. Agentic AI compounds at 119%, expanding from $15 billion to $753 billion by 2029. AI Infrastructure, the largest category by dollars, grows at just 29%. The money is following the bottlenecks. Source:  Gartner 4Q25: $4.71T AI Market Proves Agentic AI and Data Readiness Are the Only Race That Matters, Software Strategies Blog, January 22, 2026 Link: https://softwarestrategiesblog.com/2026/01/22/gartner-4q25-agentic-ai-data-readiness-4-71t-market/

 

The AI cybersecurity market is predicted to hit $51.3 billion in 2026, nearly doubling from $25.9 billion in 2025. But the category masks a structural imbalance. AI-amplified security, where AI defends the enterprise, captures 94.5% of spending at $48.5 billion. Securing AI, where the enterprise defends its own AI systems, gets $2.8 billion. Enterprises are investing 17x more in using AI as a security tool than in protecting the AI itself. Both sub-segments grow at similar CAGRs (74% vs. 72%), which means the dollar gap widens every year. By 2029, AI-amplified security reaches $160.4 billion, while securing AI hits just $11.6 billion. One is a tool. The other is the thing that needs protecting. Source: Gartner Forecasts Agentic AI Will Overtake Chatbot Spending by 2027, Software Strategies Blog, February 16, 2026 Link: https://softwarestrategiesblog.com/2026/02/16/gartner-forecasts-agentic-ai-overtakes-chatbot-spending-2027/

 

AI Data sits alone in the upper-right quadrant of Gartner’s spending map, compounding at 155% CAGR with 277% growth in 2026. AI Cybersecurity and AI Models cluster above 67% CAGR. AI Infrastructure anchors the chart as the largest bubble, but grows at just 29%. Global AI spending reaches $1.8 trillion in 2025 and $4.7 trillion by 2029. The acceleration is not in compute. It is in data readiness, security architecture, and agentic capabilities. By 2028, software with agentic capabilities crosses 50% of total application software spend, up from 2% in 2024. Non-agentic software spending starts declining in 2027. Source:Data Readiness and Security Are Driving AI’s $4.7 Trillion Run, Software Strategies Blog, December 22, 2025 Link: https://softwarestrategiesblog.com/2025/12/22/data-readiness-security-driving-ai-4-7-trillion/

Gartner’s AI spending forecast reaches $2.53 trillion in 2026 and $4.71 trillion by 2029. Eight markets. One pattern. AI Infrastructure dominates absolute dollars at $1.37 trillion in 2026 but grows at just 29% CAGR. AI Data, the smallest segment at $3.1 billion, compounds at 155%. AI Cybersecurity nearly doubles to $51.3 billion. AI Software hits $452.5 billion, growing 60% year-over-year as agentic capabilities reshape the category. The growth rates tell you where the bottlenecks are breaking. Source: Data Readiness and Security Are Driving AI’s $4.7 Trillion Run, Software Strategies Blog, December 22, 2025 Link: https://softwarestrategiesblog.com/2025/12/22/data-readiness-security-driving-ai-4-7-trillion/

Nearly nine in ten organizations now use AI in at least one business function, up from 78% a year ago, but nearly two-thirds have not begun scaling it across the enterprise. Only 6% qualify as high performers where AI contributes more than 5% to EBIT. Sixty-two percent of organizations are at least experimenting with AI agents, yet in no individual business function are more than 10% scaling them. High performers are three times more likely than peers to fundamentally redesign workflows and three times more likely to have senior leaders demonstrating ownership of AI initiatives. More than one-third of high performers commit over 20% of their digital budgets to AI, and about three-quarters have reached the scaling phase, versus one-third of other organizations. Source: McKinsey / QuantumBlack, The state of AI in 2025: Agents, innovation, and transformation, November 2025

Valued at $638.23 billion in 2024, the global AI market is projected to reach $3,680.47 billion by 2034, expanding to a CAGR of 19.20%. North America holds 31.80% market share. The software segment dominates at 51.40%, while machine learning leads by technology at 36.70%. Healthcare is expected to record the highest CAGR of 36.50% across end-use segments. Among regions, Asia-Pacific is expected to grow at 19.8% CAGR from 2025 to 2034, with AI projected to add up to $3 trillion to the region’s GDP by 2030, driven by national AI strategies in China, India, and Japan. Source: Precedence Research, AI Market Size, Growth & Trends, September 2025

Nearly $7 trillion. That’s the capital outlay data centers will require by 2030 to keep pace with demand for compute power. Of that, $5.2 trillion goes toward AI-ready facilities and $1.5 trillion toward traditional IT workloads. Global demand for data center capacity could almost triple by 2030, with about 70% of new demand coming from AI workloads. Three investment scenarios range from $3.7 trillion (constrained demand) to $7.9 trillion (accelerated demand, adding 205 incremental GW). The 60% majority of investment—$3.1 trillion—flows to technology developers and designers producing chips and computing hardware. Source: McKinsey, The cost of compute: A $7 trillion race to scale data centers, April 2025

Inference already consumed half of all AI compute in 2025. That number will grow to two-thirds in 2026 and reach 75% of all AI compute needs by 2030. Global data center capacity is projected to nearly double from 103 gigawatts to 200 GW by 2030, yet U.S. data centers already face a capacity shortfall exceeding 11 GW, with the cumulative gap expected to exceed 40 GW by 2028. North American data center capacity alone will increase eightfold, from 5.6 GW in 2024 to 44 GW by 2030. Operators are increasingly deploying edge facilities closer to end users to reduce latency as inference-dominated workloads drive a fundamental redesign of data center architectures. Source: Avid Solutions, 13 Data Center Growth Projections, January 2026

 

Generative AI could add the equivalent of $2.6 trillion to $4.4 trillion annually to the global economy, increasing the projected impact of all AI by 15 to 40%. About 75% of the value falls across four areas: customer operations, marketing and sales, software engineering, and R&D. Half of today’s work activities could be automated between 2030 and 2060, with a midpoint in 2045—roughly a decade earlier than previously estimated. When embedding effects in existing software are included, the total economic benefit rises to $6.1 trillion to $7.9 trillion annually. Source: McKinsey, The economic potential of generative AI, June 2023

The global AI market hit $294.16 billion in 2025 and is projected to grow to $2,480.05 billion by 2034, at a CAGR of 26.60%. The Banking, financial services and insurance (BFSI) segment holds 18.90% market share, while healthcare is expected to record the highest CAGR of 36.50%. In the U.S. alone, the AI market was estimated at $146.09 billion in 2024 and is predicted to reach $851.46 billion by 2034. The number of AI companies funded globally in 2024 totaled 2,049, with U.S.-funded companies accounting for 1,143, signaling strong investor confidence in the sector’s expansion potential. Source: Fortune Business Insights, AI Market Size, Growth & Trends by 2034

Big Tech’s AI capex hit $405 billion in 2025, up from a $250 billion estimate at the start of the year. Sell-side analysts have underestimated AI spending every quarter for two years running. A decade ago, Big Tech’s trailing-twelve-month capex was $24 billion—15x less than today. AI data center costs are projected at $3 trillion to $8 trillion, with gigawatt capacity expected to grow 3.5x by 2030. Source: IO Fund, Big Tech’s $405B Bet, November 2025

The global AI market was valued at $371.71 billion in 2025 and is projected to reach $2,407.02 billion by 2032, growing at a CAGR of 30.6%. Hyperscalers accounted for 53% of chip purchases in 2023, spurring 156% market growth from 2023 to 2024. While demand from hyperscalers is expected to moderate, growth of 41% is still forecast from 2025 to 2026. Enterprises are moving from cloud reliance to in-house AI infrastructure investments, particularly for cost-effective inference solutions, as edge AI gains traction through AI-enabled PCs and mobile devices. Source: Markets and Markets, AI Market Report 2025-2032

At $602 billion projected for 2026, hyperscaler capex has entered uncharted territory. Amazon, Microsoft, Google, and Meta will each exceed $100 billion individually, pushing capital intensity to 45-57% of revenue. Total hyperscaler capex from 2025-2027 is projected at $1.15 trillion, more than double the $477 billion spent from 2022-2024. Morgan Stanley and JP Morgan suggest the technology sector may need to issue $1.5 trillion in new debt over the next few years to finance AI infrastructure construction. The sheer scale of debt issuance mirrors patterns seen during the fiber-optic buildout of the late 1990s. Source: Multiple sources compiled by Introl, January 2026

The number of software companies using consumption-based pricing more than doubled between 2015 and 2024, as AI introduces new variable costs that make traditional perpetual licenses obsolete. SaaS remains dominant, but the next wave is outcome-aligned pricing that scales with actual AI usage. Software businesses that successfully adopt consumption-based pricing aligned with usage and outcomes may be better positioned to capture AI-driven value and differentiate themselves in a rapidly evolving market where the cost of each AI inference adds a new variable to the P&L. Source: McKinsey, AI adjusts the software bill, January 27, 2026

Data center capacity needs for AI and non-AI workloads could almost triple by 2030, with AI capacity increasing 3.5 times and making up roughly 70% of the total. Under a continued-momentum scenario, total capacity demand rises from 82 GW in 2025 to 219 GW by 2030, with incremental AI capacity ranging from 13 GW in 2025 to 31 GW in 2030, totaling 124 GW of new AI capacity. Non-AI workloads grow from 38 GW to 64 GW over the same period. Average power densities in AI-ready data centers have more than doubled in just two years and are expected to rise nearly four times by 2027. Source: McKinsey, Data center demands (Week in Charts), May 2025

U.S. data-center spending exceeded half a trillion dollars in 2025. The U.S. and China drove a massive expansion in AI-related computing capacity through 2024, with the U.S. pulling further ahead in the first half of 2025. AI-related trade accounted for nearly half of all merchandise trade growth in that period, despite representing only 15% of total trade volume. The infrastructure boom is reshaping international commerce, with surging demand for servers, graphics cards, and related components essential to AI training and inference now a dominant force in global supply chains. Source: Federal Reserve Board, FEDS Notes: The Global Trade Effects of the AI Infrastructure Boom, February 2026

The generative AI market is expanding from $71.36 billion in 2025 to $890.59 billion by 2032, at a CAGR of 43.4%. North America accounted for 43.05% of global revenue in 2025. Text remains the dominant data modality due to its foundational role in enterprise workflows, while the services segment is gaining traction for scalability and cost-effectiveness. Foundation model delivery platforms verticalized adoption across industries, and the rapid scaling of AI-native infrastructure are the three key forces driving the market as of 2025. The 43.4% CAGR makes this one of the fastest-expanding technology subsegments in history. Source: MarketsandMarkets, Generative AI Market Report, Global Forecast to 2032

The generative AI market reached $37.89 billion in 2025 and is projected to hit $1.2 trillion by 2035, a 37% compound annual growth rate. Transformer architectures account for more than 42% of technology revenue, driven by text-to-image and text-to-video applications. Software captures over 65% of total revenue. North America holds 41% of the market. Asia-Pacific is the fastest-growing region at a 27.6% CAGR through 2035. Financial services is expected to lead sector growth at 36.4%, fueled by fraud detection, risk management, and regulatory compliance demands. Source: Precedence Research, Generative AI Market Size, January 2026

GPUs captured 89% of AI processor revenue in 2025, but FPGA and ASIC alternatives are growing at a 17% CAGR through 2031. Hardware accounted for 68% of all AI infrastructure spending last year. North America held 40% of the market, backed by $52.7 billion in CHIPS Act grants and hyperscalers operating roughly 60% of global AI compute capacity. Liquid cooling reached 18% of AI server racks as power densities crossed 100 kilowatts per rack, the threshold where air cooling fails. Asia-Pacific is projected to grow fastest at 16.4% CAGR through 2031, driven by China’s $50 billion semiconductor fund and $15 billion in hyperscaler commitments across India. Source: Mordor Intelligence, AI Infrastructure Market Size, Trends & Growth Drivers 2031

Nearly one in four Americans has already made a purchase through AI. Morgan Stanley Research estimates agentic shoppers will drive $190 billion to $385 billion in U.S. e-commerce spending by 2030, capturing 10% to 20% of market share. Grocery and consumer packaged goods lead adoption, with 49% of AI-assisted buyers transacting in those categories. AI shopping agent users are projected to reach 126 million by 2030, up from near zero today, while traditional e-commerce users decline from 264 million to 149 million over the same period. Source: Morgan Stanley Research, Agentic Commerce Market Impact Outlook, December 2025 Link: https://www.morganstanley.com/insights/articles/agentic-commerce-market-impact-outlook

Feb 16

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Gartner forecasts agentic AI will overtake chatbot spending by 2027

 

Agentic AI spending grows 141% in 2026 to $201.9 billion. By 2027, it will overtake chatbot and assistant spending for the first time. Then chatbot spending starts declining. I’ve tracked Gartner’s AI forecasts through multiple iterations. This crossover changes where security risk concentrates for every security professional reading this.

The crossover is in the segment-level data tables of Gartner’s Forecast: AI Spending, Worldwide, 2024–2029, 4Q25. The headline number is well known: $2.53 trillion in 2026, $4.7 trillion by 2029 at 33% CAGR. The segment breakdowns are not. Eight markets. Nineteen sub-segments. The sub-segment data tells a different story than the top line.

This is Gartner’s first dedicated AI spending forecast, and I’ve been waiting for it. Gartner states that comparisons to previous AI estimates are not meaningful because the scope widened, adding AI cybersecurity, agentic AI as a separate segment from chatbots, AI data technology, and expanded infrastructure coverage. Gartner writes, “This is the first iteration of the forecast on AI spending that Gartner has published. Gartner has significantly expanded and modified its AI forecast coverage. Spending comparisons to previous iterations are therefore not meaningful as the scope has widened. This includes both coverage of new markets and broadened definitions of the types of AI spending that are reflected in some market segments.”

Forrester’s Predictions 2026: Cybersecurity and Risk arrives at the same warning from a different angle: an agentic AI deployment will cause a publicly disclosed breach in 2026, leading to employee dismissals. Two firms. Same conclusion. The spending data explains why.

CAPTION: Total worldwide AI spending, 2024–2029. $1.14T to $4.71T. 33% CAGR. Growth decelerates from 54% (2025) to 16% (2029) as the base expands. Source: Gartner Forecast: AI Spending, 4Q25 (December 2025).

The full market breakdown

AI infrastructure dominates at $1.37 trillion, 54% of the total. AI software follows at $452.5 billion, growing 60% year-over-year. AI services add $588.6 billion. AI cybersecurity and AI data are the outliers: growing at 74% and 155% CAGR, respectively, rates that dwarf everything else in the forecast.

Source: Gartner Forecast: AI Spending, Worldwide, 2024–2029, 4Q25 (December 19, 2025). All figures in U.S. dollars. CAGR = 2024–2029. Gartner press release: https://www.gartner.com/en/newsroom/press-releases/2026-1-15-gartner-says-worldwide-ai-spending-will-total-2-point-5-trillion-dollars-in-2026

Infrastructure takes 54% of every AI dollar

AI-optimized servers alone account for $421.6 billion in 2026, growing to $699.7 billion by 2029. AI processing semiconductors add $289.4 billion. AI-optimized IaaS hits $38.3 billion at 71% CAGR, the fastest-growing infrastructure sub-segment. AI network fabric, a new category in this forecast, reaches $28.7 billion.

Infrastructure’s share drops from 54% to 48% by 2029 as software and services scale faster. The capital-intensive build-out phase is not over.

The agentic crossover nobody is planning for

Gartner now splits AI software into chatbots/assistants and agentic AI. The spending lines cross in 2027.

CAPTION: Agentic AI spending overtakes chatbot/assistant spending by 2027. Chatbots peak at $264.7B then decline. Agentic AI grows at 119% CAGR to $752.7B by 2029. Source: Gartner Forecast: AI Spending, 4Q25 (December 2025). AI Software segment, Table 1-2.

Source: Gartner Forecast: AI Spending, 4Q25 (December 2025). CAGR = 2024–2029.

Chatbots talk to people. Agents act on behalf of people. They access databases, execute transactions, chain multi-step workflows without human approval at each step. The attack surface has moved well beyond conversation windows. Agents are autonomous decision engines with production access.

Gartner’s Top Trends in Cybersecurity for 2026 lists agentic AI oversight as the number-one trend. Forrester’s Predictions 2026: Cybersecurity and Risk goes further: an agentic AI deployment will cause a public breach this year, and employees will lose their jobs for it. Forrester senior analyst Paddy Harrington calls it a “cascade of failures,” not a single point of error. Two analyst firms. Different methodologies. Same conclusion. Security strategies built for chatbot-era risk have a shelf life measured in quarters, not years.

AI cybersecurity is two markets, not one

Gartner created a dedicated AI cybersecurity market for the first time in this forecast. It nearly doubles in 2026. But the category name hides a structural split that matters more than the growth rate.

Source: Gartner Forecast: AI Spending, 4Q25 (December 2025). CAGR = 2024–2029.

Two sub-segments. Two very different problems.

AI-amplified security ($48.5 billion, 94.5% of the market) is what most enterprises mean when they say “AI cybersecurity.” This is AI working for your security team. Machine learning models that analyze network traffic patterns and flag anomalies faster than a human analyst can. Natural language processing that reads threat intelligence feeds and correlates indicators of compromise across millions of data points in seconds. Automated triage systems that prioritize which of the 11,000 daily alerts actually need a human response. AI-powered endpoint detection that identifies malware variants that signature-based tools miss. Behavioral analytics that learn what normal looks like for each user and flag deviations. Security orchestration platforms that automate incident response playbooks, reducing mean time to containment from hours to minutes.

This is the category where enterprises are spending aggressively. And for good reason. The math on analyst workloads demands it. Security operations centers are drowning in alerts, facing a persistent talent shortage, and defending attack surfaces that expand every quarter. AI-amplified tools address all three.

Securing AI ($2.8 billion, 5.5% of the market) is the other problem. AI-amplified security puts AI to work defending the enterprise. Securing AI reverses the relationship entirely — defending the AI itself. Protecting the models, the training data, the inference pipelines, the agent workflows, and the decision outputs that enterprises are deploying at $2.53 trillion in 2026. Prompt injection defenses. Model access controls. Training data poisoning detection. Output validation. Agent permission boundaries. Audit trails for autonomous decisions.

The distinction matters because they protect different things. AI-amplified security protects your enterprise using AI. Securing AI protects the AI itself. One is a tool. The other is the thing that needs protecting. Enterprises are investing 17 times more in the tool than in protecting the thing the tool runs on.

Shadow AI is not just employees using ChatGPT

Gartner names the mechanism driving AI software growth: vendor push. Software providers are integrating GenAI and agentic AI into existing product lines. AI software grows from $143 billion in 2024 to $981 billion by 2029 at 47% CAGR.

For CISOs, vendor push changes the equation. AI capabilities are being added to tools already in production. Often without explicit procurement decisions. The AI features embedded in your existing ERP, CRM, and developer platforms may already exceed what your security team has inventoried. Shadow AI is vendors activating AI inside products you already own.

The smallest market with the biggest growth rate

AI data technology: $134 million in 2024. $3.1 billion in 2026. $14.6 billion by 2029. The 155% CAGR is the highest in the forecast. The 277% year-over-year growth in 2026 is the steepest single-year jump of any segment.

Synthetic data generation is the standout sub-segment, going from $41 million to $6.8 billion by 2029. Gartner is direct: enterprises need AI-ready data with proper labeling, quality checks, and compliance. For organizations running AI projects on ungoverned data, the readiness gap compounds every quarter.

CAPTION: AI spending markets ranked by five-year CAGR. AI Data (155%) and AI Cybersecurity (74%) lead. AI Infrastructure is the largest by absolute dollars. Source: Gartner Forecast: AI Spending, 4Q25 (December 2025).

Indirect services are the governance blind spot

Indirect AI services, where AI is a supporting component in a larger project, grow from $78.4 billion in 2024 to $255.9 billion in 2026 at 50% CAGR. Direct AI services hit $332.8 billion. By 2028, indirect overtakes direct.

Indirect AI means capabilities embedded in consulting and implementation projects that procurement does not classify as AI. If you cannot see it in your AI inventory, you cannot govern it.

Servers are a bigger market than AI software

AI-optimized servers alone hit $421.6 billion in 2026, just below the entire AI software market at $452.5 billion. By 2029, servers reach $699.7 billion. Cloud providers are building capacity for AI workloads that have not materialized at scale. The infrastructure is ahead of the applications.

The enterprise agentic stack is showing up in spending data

Gartner’s DSML segment includes a dedicated agent builder platforms sub-segment at $5.0 billion in 2026, reaching $13.7 billion by 2029. AI observability and governance adds $1.3 billion, growing to $4.0 billion. The xOps sub-segment (MLOps, DataOps, ModelOps) is the largest at $15.0 billion.

Together, these form the tooling layer for building, monitoring, and governing agents in production. The enterprise agentic stack is materializing in the spending data. Most organizations have not formalized it in their architecture.

The numbers that belong in your next board deck

If you take one thing from this forecast into a budget meeting, take this table. I built it from the raw spreadsheet data. Six years of AI deployment spending next to AI security spending. The bottom row is the one that gets the questions.

Source: Gartner Forecast: AI Spending, 4Q25 (December 2025). All percentages derived from Gartner’s published data tables (Tables 1-1 and 1-2).

The ratio improves over time. Securing AI goes from 0.07% in 2024 to 0.25% by 2029. But watch the absolute numbers. In 2029, enterprises will spend $4.71 trillion deploying AI and $11.6 billion securing it. The percentage gets better. The dollar gap gets wider. Every year, the market grows its way into a larger exposure.

Where I think this lands

Three things worth tracking from the segment data:

The agentic crossover. Agentic AI overtakes chatbot spending in 2027. The enterprise risk profile shifts from conversational data leakage to autonomous decision-making at scale. CISOs who build agentic governance frameworks in 2026 position themselves before the inflection. The spending curve says the window is narrowing.

The securing-AI gap. $2.8 billion to protect AI systems in a year when $2.53 trillion deploys them. Enterprises are enthusiastic about using AI for defense. The investment in defending AI itself has not caught up.

Data readiness is the bottleneck. The 277% growth in AI data spending confirms that AI without governed data delivers diminished returns. Data classification investments directly enable or constrain AI ROI.

If your security budget is growing at 12% and AI deployment inside your enterprise is growing at 44%, the gap compounds every quarter. You cannot close it by holding steady. The organizations getting this right treat AI security as a proportion of AI deployment, not a fixed line item.

—

Sources

Gartner, Forecast: AI Spending, Worldwide, 2024–2029, 4Q25, December 19, 2025, ID G00843179.

Gartner press release (January 15, 2026): https://www.gartner.com/en/newsroom/press-releases/2026-1-15-gartner-says-worldwide-ai-spending-will-total-2-point-5-trillion-dollars-in-2026

Gartner, Top Trends in Cybersecurity for 2026 (February 5, 2026): https://www.gartner.com/en/newsroom/press-releases/2026-02-05-gartner-identifies-the-top-cybersecurity-trends-for-2026

Gartner, IT Spending Forecast 1Q26 (February 3, 2026): https://www.gartner.com/en/newsroom/press-releases/2026-02-03-gartner-forecasts-worldwide-it-spending-to-grow-10-point-8-percent-in-2026-totaling-6-point-15-trillion-dollars

Forrester, Predictions 2026: Cybersecurity and Risk (October 2025): https://www.forrester.com/blogs/predictions-2026-cybersecurity-and-risk/

All dollar figures in U.S. dollars. Growth rates and CAGR derived from Gartner’s published data tables (Tables 1-1 and 1-2).

Feb 10

Top 6 cybersecurity trends from Gartner’s 2026 Security Forecast

Over 57% of employees are using personal GenAI accounts for work. A third of them admit to uploading sensitive data into tools their security teams haven’t approved. Meanwhile, agentic AI is proliferating through no-code platforms and vibe coding, creating attack surfaces most CISOs can’t see, let alone govern. And quantum computing? No longer a 10-year planning horizon. It’s a 2030 action deadline.

Gartner’s Top Trends in Cybersecurity for 2026 report, released February 5, 2026, identifies six forces reshaping how CISOs must operate. These cut across governance, AI adoption, identity, workforce, and cryptographic strategy simultaneously. None of them is incremental.

The trends report lands alongside Gartner’s updated Forecast: Information Security, Worldwide, 2023–2029, 4Q25 (G00843183, December 18, 2025) and the Forecast Analysis: Information Security, Worldwide, 2026 (G00838442, February 5, 2026), which together project global information security spending reaching $244.2 billion in 2026, up 13.3% in current U.S. dollars. I’ve tracked this forecast through multiple quarterly updates. The trajectory keeps steepening. The six trends below explain where that money is going and why.

“Cybersecurity leaders are navigating uncharted territory this year as these forces converge, testing the limits of their teams in an environment defined by constant change,” said Alex Michaels, Director Analyst at Gartner. “This demands new approaches to cyber risk management, resilience, and resource allocation.”

The spending backdrop: $244 billion and accelerating

Before getting into the six trends, context matters. Gartner’s 4Q25 forecast shows the three major security segments all growing at double-digit constant currency rates in 2026:

Source: Gartner Forecast: Information Security, Worldwide, 2023–2029, 4Q25 Update (G00843183). Constant currency rates.

Cloud security remains the fastest-growing subsegment at 28.8% growth in 2026. Nothing else comes close. The combined cloud security market (cloud security posture management, cloud access security brokers, and cloud workload protection platforms) is projected to reach $32.4 billion by 2029, with a 25% CAGR in constant currency. I’ve been watching this subsegment accelerate for three quarters straight. CSPM alone is growing at a 31.30% CAGR.

 

Cloud security spending reaches $32.4 billion by 2029. CSPM leads at 31.30% CAGR. Source: Gartner 4Q25 Forecast. (Please click on the image to expand for easier reading)

Trend 1: Agentic AI demands cybersecurity oversight

This is the trend that touches everything else on this list. Employees and developers are deploying AI agents through no-code/low-code platforms and “vibe coding” at a pace that outstrips security governance. Unmanaged AI agent proliferation. Unsecured code. Compliance violations that most security teams don’t even have visibility into yet. That’s the picture Gartner is painting.

Gartner’s recommendation is blunt: cybersecurity leaders must identify both sanctioned and unsanctioned AI agents operating within their environments, enforce access controls and data guardrails, and develop incident response playbooks specific to agent-driven threats.

“While AI agents and automation tools are becoming increasingly accessible and practical for organizations to adopt, strategic cybersecurity planning for these technologies is essential,” said Michaels. Cybersecurity leaders must work cross-functionally to manage agentic AI adoption, identifying sanctioned and unsanctioned AI agents, enforcing data access controls, and developing incident response playbooks.

The spending data backs this up. Gartner’s 4Q25 forecast projects the AI-amplified security market reaching $160 billion by 2029, up from $49 billion in 2025. Gartner is clear that this isn’t additive spending. It represents the portion of existing security products that now embed AI capabilities. But the expectation tells the story: over 75% of enterprises will use AI-amplified cybersecurity products by 2028, up from less than 25% in 2025. Vendors that don’t embed AI will lose shelf space. (For more on AI security platforms, see Gartner’s Top Strategic Technology Trends for 2026, which predicts that over 50% of enterprises will use AI security platforms to protect their AI investments by 2028.)

Trend 2: Global regulatory volatility drives cyber resilience efforts

Regulators are getting personal. Boards and executives now face direct liability for compliance failures. Not just organizational fines, but individual accountability. The penalties for inaction have moved from theoretical to career-ending. Across multiple jurisdictions simultaneously.

Gartner advises cybersecurity leaders to formalize collaboration across legal, business, and procurement teams to establish clear accountability for cyber risk. Align control frameworks to recognized standards. Address data sovereignty concerns before they become enforcement actions. The organizations doing this well are treating regulatory preparedness as a core security function, not an annual compliance checkbox.

This is where the spending data gets interesting. Gartner’s forecast shows security consulting services growing from $24.2 billion (2024) to $36.6 billion (2029), adding $12.4 billion in five years. Security professional services follow a similar trajectory: $27.3 billion to $40.8 billion, adding $13.5 billion. Organizations are buying outside expertise because they can’t build regulatory competence fast enough in-house. I’ve been covering these numbers for three quarters, and the services growth is the part of the forecast that keeps surprising me.

Infrastructure protection adds $26.4 billion between 2024 and 2029, the largest absolute growth of any subsegment. Source: Gartner 4Q25 Forecast. (Please click on the image to expand for easier reading)

Trend 3: Post-quantum computing moves into action plans

Gartner predicts advances in quantum computing will render the asymmetric cryptography that organizations rely on unsafe by 2030. Four years. That’s the window to adopt post-quantum cryptography alternatives before “harvest now, decrypt later” attacks start cashing in on data that adversaries are collecting today.

Organizations need to identify their cryptographic deployments, assess data sensitivity and lifespan, and prioritize cryptographic agility. That last phrase keeps coming up in my conversations with CISOs. The ability to swap encryption methods without re-architecting entire systems. Swapping an algorithm is one thing. Doing it across a production environment without downtime is an entirely different problem.

“Post-quantum cryptography is reshaping cybersecurity strategies by prompting organizations to identify, manage, and replace traditional encryption methods, while prioritizing cryptographic agility,” said Michaels. “By investing in these capabilities and prioritizing migration now, assets will be secured when quantum threats become a reality.“

The encryption market in Gartner’s 4Q25 forecast grows from $1.04 billion in 2023 to $2.04 billion by 2029 at an 11.95% CAGR. A 2.0x increase. For what has historically been one of the slower-growing security subsegments, that’s a significant acceleration. Quantum urgency is changing the math.

Trend 4: Identity and access management adapts to AI agents

AI agents are breaking traditional IAM models. Plain and simple. Identity registration and governance, credential automation, and policy-driven authorization weren’t designed for autonomous machine actors that can initiate actions, access data, and interact with systems without human intervention. The scale problem compounds fast: when every employee can deploy dozens of AI agents, the identity surface area explodes.

Gartner recommends a targeted, risk-based approach. Invest where gaps and risks are greatest. Leverage automation where possible. The practical starting point is understanding which AI agents carry the most privilege and the least oversight. Those are your highest-risk identities right now, and most organizations haven’t inventoried them.

The identity market is already significant. Gartner’s 4Q25 forecast shows identity access management growing from $18.7 billion (2024) to $29.0 billion (2029), adding $10.3 billion in five years. That’s before the full scale of agentic AI identity requirements hits the market. IAM vendors that solve machine-actor identity at scale will capture a disproportionate share of that $10.3 billion growth.

Trend 5: AI-driven SOC solutions destabilize operational norms

AI-enabled security operations centers are enhancing alert triage and investigation workflows. The technology works. But deploying AI into a SOC doesn’t automatically reduce headcount needs. It changes the skill mix. Analysts who excelled at manual triage need different capabilities to oversee AI-driven workflows. Organizations are discovering this the hard way. That’s an organizational transformation challenge, and throwing more technology at it doesn’t help.

“To realize the full potential of AI in security operations, cybersecurity leaders must prioritize people as much as technology,” said Michaels. “Strengthening workforce capabilities, implementing human-in-the-loop frameworks into AI-supported processes and aligning adoption with clear strategic objectives will be critical to maintaining resilience as SOCs evolve.”

The talent dimension makes this harder than it already sounds. ISC2’s 2024 Cybersecurity Workforce Study, published in October 2024, documented a global workforce gap of 4.8 million professionals, a 19% year-over-year increase. The active workforce flatlined at 5.5 million (up just 0.1%). The numbers are brutal: 25% of organizations reported cybersecurity layoffs in 2024. 37% faced budget cuts. 90% report skills shortages. 58% believe the shortage puts their organization at significant risk. On the spending side, managed security services are growing at 11.1% in 2026, the fastest rate in the services segment. Organizations can’t hire fast enough, so they’re buying managed SOC capacity instead.

Trend 6: GenAI breaks traditional cybersecurity awareness tactics

Existing security awareness programs are failing. Full stop. A Gartner survey of 175 employees conducted between May and November 2025 found that 57% use personal GenAI accounts for work purposes, while 33% admit to uploading sensitive information to tools their organizations haven’t sanctioned. Those numbers should alarm every CISO reading this. A third of your workforce is actively feeding proprietary data into tools you can’t audit.

Gartner recommends shifting from general awareness training to adaptive behavioral programs that include AI-specific tasks. Generic compliance videos won’t cut it here. The organizations getting this right are making approved GenAI tools easy to access and unsanctioned tools hard to justify. Trying to ban GenAI outright just drives usage underground and costs you talent.

Strengthening governance, embedding secure practices, and establishing clear policies for authorized GenAI use will reduce exposure to privacy breaches and intellectual property loss. The governance gap on GenAI usage is, in my view, the most underestimated risk on this entire list. Every other trend has a spending line item attached to it. This one requires behavioral change, which is harder to buy.

Total market trajectory: $173.5 billion to $323.5 billion

Gartner’s year-by-year spending trajectory shows the acceleration curve these six trends are riding:

Source: Gartner Forecast: Information Security, Worldwide, 2023–2029, 4Q25 Update (G00843183, December 18, 2025). Current U.S. dollars.

 

CSPM and CASB lead all security categories with 31% and 26% CAGR through 2029. Source: Gartner 4Q25 Forecast. (Please click on the image to expand for easier reading)

What this means for CISOs

Three of the six trends (agentic AI oversight, IAM for machine actors, and GenAI awareness) are fundamentally about the same problem: autonomous AI systems operating inside enterprise environments without adequate governance. The other three (regulatory volatility, post-quantum readiness, and AI-driven SOCs) are the structural forces those governance failures will collide with. That convergence is the signal about where 2026 budgets need to go.

The organizations that will navigate this environment successfully are doing three things simultaneously:

Mapping their AI agent footprint now. If you don’t know how many AI agents are operating across your environment, sanctioned and unsanctioned, you can’t govern what you can’t see. Gartner’s 75% AI-amplified product adoption projection by 2028 means this window for establishing control is narrow.

Building cryptographic agility into their architecture. The 2030 quantum deadline means migration planning starts in 2026, not 2028. The encryption market’s 2.0x growth reflects early movers. Late movers face rip-and-replace costs that compound every quarter they wait.

Investing in people alongside AI tooling. AI-enabled SOCs work when human operators have the skills to oversee them. The ISC2 data is unambiguous: a 4.8 million professional gap growing at 19% year-over-year. Managed security services growth at 11.1% tells you where CISOs are finding capacity.

Gartner’s numbers aren’t projections anymore. They’re procurement trends already hitting finance systems. The $244.2 billion flowing into information security this year will fund agentic AI governance, quantum migration, and SOC transformation, whether your organization participates or not.

Bottom line: CISOs planning for 2027 are watching their competitors buy the tools they’ll be scrambling for in 18 months. The data says move now.

Jan 13

Gartner’s 4Q25 Information Security forecast shows 15 categories capturing half of all new security spending through 2029

Gartner's 4Q25 Information Security forecast shows 15 categories capturing half of all new security spending through 2029

Fifteen cybersecurity categories are growing up to three times faster than the overall market, capturing $48.7 billion in new spending by 2029.

That’s nearly half of the $98.4 billion the entire security market will add over the next four years. Cloud Security Posture Management leads the pack at 29.36% CAGR. Cloud Access Security Brokers follow at 24.81%.

Enterprises are fundamentally restructuring their security budgets, and the driver is brutal in its simplicity. Organizations now manage an average of 112 SaaS applications across multiple cloud providers. 82% of misconfigurations are caused by human error, according to Exabeam’s analysis. And Gartner estimates 99% of cloud security failures through 2025 will be the customer’s fault, primarily from these misconfigurations. Manual oversight breaks under this kind of scale. Enterprises are responding by investing in automation that manages what people can’t across hundreds of cloud accounts, thousands of APIs, and millions of attack vectors.

Gartner’s 4Q25 update delivers the clearest signal yet about where enterprise security budgets are heading. The overall information security market grows from $213.5 billion in 2025 to $311.9 billion by 2029 at 10.03% CAGR. These fifteen high-growth categories are expanding at 10.30% to 29.36% CAGR, capturing investment dollars at rates that dwarf legacy security spending patterns.

What makes these categories different

Every high-growth category eliminates manual bottlenecks that break under cloud-native workloads. CSPM scans configurations continuously. CASB provides visibility into unauthorized SaaS usage. ZTNA verifies every connection rather than trusting the network location. With 79% of organizations using multiple cloud providers, according to Spacelift’s research, manual processes create mathematical impossibilities.

These technologies prevent problems rather than clean up after them. CSPM catches misconfigurations before breaches. ZTNA eliminates the attack surface that VPNs create. Tokenization protects data even when systems get compromised. Security teams are finally getting ahead of threats instead of constantly playing catch-up.

And the ROI is quantifiable. IBM’s 2025 Cost of a Data Breach Report shows organizations using AI and automation extensively save $1.9 million per breach and reduce breach lifecycles by 80 days. U.S. breach costs average $10.22 million. These investments pay for themselves with a single prevented incident—a calculation CFOs understand.

Gartner's 4Q25 Information Security forecast shows 15 categories capturing half of all new security spending through 2029

The 15 categories reshaping enterprise security

1. Cloud Security Posture Management (CSPM) — 29.36% CAGR — $4.68B → $12.76B

CSPM platforms scan infrastructure continuously across AWS, Azure, and Google Cloud, automatically remediating misconfigurations before they become breaches. The 82% human error rate isn’t going to improve through training. Organizations managing 100+ cloud accounts need automation. CSPM adds $8.09 billion in new spending by 2029, the single largest dollar contribution among high-growth segments.

2. Cloud Access Security Brokers (CASB) — 24.81% CAGR — $2.30B → $5.58B

Here’s the brutal reality. Enterprises average 112 SaaS applications, but shadow IT accounts for 42% of all applications per JumpCloud’s data. IT stays blind to roughly 78 apps out of an average 187-app environment. The damage? 65% of shadow IT deployments result in data loss, and 52% lead to breaches, according to Mimecast research. CASBs restore visibility and control, growing to $5.58 billion by 2029.

3. Zero Trust Network Access (ZTNA) — 21.95% CAGR — $2.48B → $5.43B

ZTNA replaces the VPN model with application-specific access controls. Instead of network-level access, it provides application-specific connections verified for every request. Gartner predicts 70% of new remote access deployments will use ZTNA by 2025, up from less than 10% at the end of 2021. And 65% of companies plan to retire VPNs within one year per Cybersecurity Insiders data. This represents a wholesale rethinking of secure access. The perimeter-based model is dying. Good riddance.

4. Threat Intelligence — 21.73% CAGR — $2.58B → $5.69B

Modern threat intelligence platforms fuse telemetry from open-source intelligence, dark-web monitoring, vendor feeds, and internal logs. Machine learning prioritizes indicators based on organizational relevance. IBM data shows organizations integrating threat intelligence reduce detection and escalation costs while cutting incidents by 30%. The market reaches $5.69 billion by 2029 as enterprises shift from passive threat feeds to automated response integration.

5. Cloud Workload Protection Platforms (CWPP) — 21.53% CAGR — $5.98B → $13.11B

Traditional endpoint security can’t protect containers that spin up and vanish in seconds. Serverless functions executing for milliseconds? Legacy tools weren’t designed for that. CWPP solutions instrument workloads directly at the kernel or hypervisor level, monitoring system calls, file access, and network connections in real-time. The 21.53% CAGR reflects the rapid shift toward microservices and Kubernetes. As workloads migrate into container clusters, protecting them becomes a survival-level priority.

6. Consent and Preference Management — 20.22% CAGR — $0.81B → $1.64B

GDPR fines surpassed €5.88 billion by January 2025, according to DLA Piper’s annual survey. California’s CCPA penalties keep climbing. The California Privacy Protection Agency recently fined Todd Snyder $345,178 for inadequate opt-out and privacy request processes. Manual consent workflows can’t meet regulatory deadlines across jurisdictions. Automated platforms centralize preferences across web, mobile, and API endpoints while providing auditable logs for regulators.

7. Subject Rights Request (SRR) Automation — 14.26% CAGR — $1.24B → $2.01B

When users demand “delete my data,” these platforms automate orchestration across internal systems and third-party vendors. Privacy laws grant individuals rights to access, correct, and delete personal data with strict compliance timelines. SRR automation prevents the penalties that result from manual processing failures at scale, especially as more jurisdictions implement data privacy regulations.

8. Network Detection and Response (NDR) — 13.44% CAGR — $2.15B → $3.37B

NDR platforms establish behavioral baselines using statistical analysis and machine learning. When anomalies appear (unusual lateral movement, data exfiltration attempts, command-and-control traffic), they raise alerts or automatically isolate systems. The mindset shift matters here. Rather than hoping to prevent all attacks, sophisticated organizations invest in rapid detection that minimizes damage when attackers inevitably breach perimeters. Prevention alone isn’t sufficient anymore.

9. Vulnerability Assessment — 13.02% CAGR — $3.48B → $5.60B

Quarterly vulnerability scans are obsolete in CI/CD pipelines deploying multiple times daily. Modern assessment platforms provide continuous scanning integrated with exploit intelligence to prioritize patches based on real-world risk. DevOps teams need vulnerability detection that keeps pace with their deployment cadence. Anything less creates unacceptable exposure windows.

10. Tokenization — 12.68% CAGR — $1.34B → $2.11B

Tokenization replaces sensitive data with non-reversible tokens that can’t be mathematically decoded. The urgency comes from quantum computing advances. NIST finalized post-quantum encryption standards in August 2024, including ML-KEM (formerly CRYSTALS-Kyber) and ML-DSA (formerly CRYSTALS-Dilithium). Attackers already practice “harvest now, decrypt later”—collecting encrypted data today for quantum decryption within five to ten years. Organizations must begin quantum-safe transitions now.

11. Endpoint Protection Platform (EPP) — 12.51% CAGR — $17.68B → $28.36B

The largest single category adds $10.68 billion in new spending as ransomware attacks surge. U.S. ransomware attacks increased 149% year-over-year—from 152 incidents in early 2024 to 378 in the same period of 2025, according to Cyble analysis. Next-generation EPP platforms use behavioral analytics and signatureless detection to stop ransomware before encryption begins, catching what traditional antivirus misses.

12. Secure Web Gateway (SWG) — 11.63% CAGR — $4.44B → $6.74B

Malicious sites appear and disappear in hours. Cloud-delivered SWGs update threat intelligence in real-time, protecting remote and hybrid workforces wherever they connect. Integration with ZTNA creates comprehensive security that follows users across devices and locations without relying on network perimeters that no longer exist.

13. Web Application Firewalls (WAF) — 10.92% CAGR — $2.48B → $3.74B

Organizations expose hundreds of APIs and microservices—each a potential attack vector. Traditional network firewalls can’t inspect application-layer attacks like SQL injection, cross-site scripting, or API abuse. Modern WAFs use machine learning to differentiate legitimate user behavior from attack traffic without blocking customers. Getting that balance right is harder than it sounds.

14. Encryption — 10.64% CAGR — $1.35B → $1.98B

NIST’s standardization of quantum-resistant algorithms signals the urgency that organizations can no longer ignore. With quantum computing advances accelerating, encrypted data collected today faces decryption within a decade. Enterprises must transition to post-quantum cryptography now because full integration across complex environments takes years. This isn’t theoretical risk anymore.

15. Security Information and Event Management (SIEM) — 10.30% CAGR — $7.60B → $11.15B

AI transforms SIEM from reactive log collection to proactive threat hunting. The latest platforms embed unsupervised machine learning to detect zero-day attacks and automatically enrich alerts with context. Organizations using AI-powered automation save $1.9 million per breach and cut incident lifecycles by 80 days—turning security operations into a competitive advantage rather than a cost center.

Why this matters

Cloud complexity has proven exponential. With 79% of organizations using multiple cloud providers and managing hundreds of accounts, manual security processes break under the load. The 29.36% CAGR for CSPM isn’t market optimism. It’s organizational survival.

Shadow AI joins shadow IT as a core threatscape element. Shadow AI breaches cost $4.63 million—$670,000 more than standard incidents, according to IBM data. But AI also powers the best defenses, with automated security tools reducing breach lifecycles by 80 days. The same technology that creates vulnerabilities offers the most effective countermeasures.

Compliance costs keep accelerating. Between GDPR, CCPA, and emerging global regulations, manual compliance processes create escalating liability. Automated platforms turn regulatory requirements into competitive advantages by reducing fine exposure and accelerating data subject request responses.

Bottom Line

The organizations winning this transformation aren’t those with the largest security budgets. They’re the ones investing in the right categories at the right time. These fifteen segments define what modern security architecture looks like and capture nearly half of all new security spending through 2029.

Gartner’s 4Q25 data delivers a clear message. Security spending is shifting to automation-driven, zero-trust, cloud-native architectures. Organizations still relying on legacy approaches aren’t just falling behind. They’re accepting risks the market has already priced as unacceptable.

Source: Gartner Forecast: Information Security, Worldwide, 2023-2029, 4Q25 Update (Document G00843183, published December 18, 2025), showing overall market growth from $213.5B (2025) to $311.9B (2029) at 10.03% CAGR in constant currency.

 

 

Dec 30

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AI Security market 2025 funding data, top startups, and the ServiceNow factor

ServiceNow dropped $11.6 billion on security acquisitions in 2025 alone. Armis for $7.75 billion. Moveworks for $2.85 billion. Veza for roughly $1 billion. In 2025, just one company, ServiceNow, spent more on acquiring security startups than 175 startups raised in two years. Meanwhile, the entire AI security startup ecosystem raised $8.5 billion across 175 companies over 24 months. That single data point should reshape how security leaders think about vendor consolidation and how AI builders think about their exit paths.

I analyzed Crunchbase data covering every AI security startup that raised Series A, B, or C funding between January 2024 and December 2025. The patterns are striking.

The acceleration is real

Q1 2024: $274 million across 8 deals. Q4 2025: $2.17 billion across 28 deals. That’s 8x growth in quarterly funding over two years.

The full-year numbers tell the story more clearly. 2024 saw $2.16 billion in total funding. 2025 hit $6.34 billion, nearly tripling. Average deal sizes jumped from $34 million to $54 million. This isn’t a gentle upward trend. The market is restructuring in real time.

Where the money flows

Network and Zero Trust infrastructure captured $1.9 billion across 44 companies. Tailscale‘s $161 million Series C reflects what enterprises already know. VPN architectures are dying. Identity-based access is replacing them.

Threat Detection and SOC automation drew $1.2 billion across 28 companies. 7AI‘s $130 million Series A stands out as one of the largest A funding rounds in this category. The bet: AI agents can handle the full security operations lifecycle at a scale human analysts cannot match.

Identity and Access Management pulled $990 million. But here’s what matters: that money went to just 6 companies. Saviynt‘s $700 million Series B dominates the category. When one company captures 71% of a category’s funding at Series B, investors see platform consolidation ahead. ServiceNow’s Veza acquisition, three weeks later, validated that thesis.

Insights into deal sizes

Median tells a different story from average deal sizes. Series A median: $20 million. Series A average: $28 million. The gap widens at later stages. Series C median: $85 million. Series C average: $119 million.

Translation: mega-deals skew the data significantly. Eighteen companies raised $100 million or more. Those 18 deals represent 10% of companies but 40% of total funding. For every Saviynt raising $700 million, dozens of startups are raising $15-25 million Series A rounds.

The AI/LLM security gap

Only 13 companies focus specifically on securing AI systems, LLMs, and agentic applications. Total funding: $414 million. That’s less than 5% of the $8.5 billion total. For context: ServiceNow paid more for Veza alone than the entire AI/LLM security category raised in two years.

The players building in this space:

• Noma Security ($100M, Series B). Unified AI and agent security platform.

• Credo AI ($21M, Series B). AI governance and compliance automation.

• Lakera ($20M, Series A). Real-time GenAI security against LLM vulnerabilities.

• Prompt Security ($18M, Series A). Enterprise generative AI adoption platform.

• GetReal Security ($17.5M, Series A). Deepfake and AI-generated impersonation defense.

• Jericho Security ($15M, Series A). Training against generative AI-powered attacks.

Enterprises are deploying AI systems at unprecedented rates. Shadow AI breaches cost $4.63 million per incident. That’s $670,000 more than standard breaches, according to IBM’s 2025 Cost of a Data Breach Report. Model Context Protocol vulnerabilities. Prompt injection attacks. Data exfiltration through AI assistants. The attack surface expands while protection lags.

Either these 13 companies scale rapidly, established players acquire their way into the space, or CISOs face a protection gap without commercial solutions.

How spending breaks out geographically

The U.S. captured $6.1 billion across 119 companies. That’s 71% of total funding. Israel remains the second hub: 15 companies, $738 million. Germany, the UK, and Canada trail with single-digit percentages.

Within the U.S., California dominates: $2.7 billion across 62 companies. That’s more than all non-U.S. markets combined ($2.4 billion). Texas ($865M), New York ($667M), and Colorado ($295M) round out the top states.

The concentration creates vendor risk. Regulatory fragmentation between the U.S. and EU markets. Geopolitical tensions affecting Israeli companies. Single-region dependency in security infrastructure. These are fundamental considerations for enterprise security architects.

ServiceNow’s acquisitions signal large-scale consolidation

ServiceNow’s 2025 acquisition spree warrants its own analysis. Armis brings cyber-physical security and OT/IoT visibility. Moveworks adds agentic AI capabilities. Veza delivers identity security for the AI era. The company calls it an “AI control tower.” A unified security stack that sees, decides, and acts across the entire technology footprint.

The driver: ServiceNow’s Security and Risk business crossed $1 billion in annual contract value in Q3 2025. They expect Armis alone to triple their market opportunity. When a platform vendor invests $11.6 billion in its own security workflows, point solutions become acquisition targets or competitors.

What this means for 2026

For security leaders: Map your vendor portfolio against both funding momentum and M&A activity. Startups with strong backing will survive consolidation. Others won’t. Audit your AI deployment pipeline against available protections. The gap between AI adoption and AI security is widening. Accelerate zero-trust adoption while solutions mature.

For AI builders: Security isn’t a feature to add later. The $414 million flowing into AI/LLM security represents smart money recognizing that unprotected AI systems are enterprise liabilities. Build with guardrails or build vulnerabilities.

Analysis based on Crunchbase data covering 175 AI security startups that raised Series A, B, or C funding between January 2024 and December 2025. ServiceNow acquisition data from the company’s press releases dated December 2025.

Nov 26

15 fastest-growing security categories in Gartner’s 3Q25 Information Security Forecast

15 fastest-growing security categories in Gartner's 3Q25 Information Security Forecast

Cloud Security Posture Management is growing at a 31.23% CAGR. Zero Trust Network Access at 23.25%. Threat Intelligence at 22.17%. The overall security market? Just 10.55%. Fifteen categories are outpacing the market by two to three times, collectively capturing $106 billion in new spending by 2029. Enterprise security budgets aren’t just expanding. They’re being redirected.

And the driver? Brutally simple.

Gartner estimates 99% of cloud security failures through 2025 will be the customer’s fault, primarily due to misconfigurations. Organizations are responding by investing aggressively in technologies that automate what humans simply can’t manage manually across hundreds of cloud accounts, thousands of APIs, and millions of potential attack vectors.

What these growth rates say about Gartner’s view of the market 

These fifteen categories represent $106.4 billion in new spending by 2029, growing from today’s baseline. What do they have in common? Three characteristics that explain why enterprises are pouring money into them:

  • Automation at Scale. Every high-growth category automates processes that break when done manually, whether it’s scanning cloud configurations, managing consent across jurisdictions, or detecting behavioral anomalies in network traffic. There’s no other way to keep pace.
  • Proactive vs. Reactive. These technologies prevent problems rather than clean up after them. CSPM catches misconfigurations before breaches. ZTNA eliminates the attack surface that VPNs create. Tokenization protects data even if systems are compromised. Security teams are finally getting ahead of the threat curve instead of playing catch-up.
  • Measurable ROI. IBM’s 2025 Cost of a Data Breach Report shows organizations using AI and automation extensively save $1.9 million per breach and reduce breach lifecycle by 80 days. With U.S. breach costs hitting $10.22 million, these investments pay for themselves with a single prevented incident.

15 fastest-growing security categories in Gartner's 3Q25 Information Security Forecast

The 15 categories reshaping security architecture

1. Cloud Security Posture Management (CSPM) | 31.23% CAGR | $2.5B → $13.0B

CSPM tools continuously scan infrastructure across AWS, Azure, and Google Cloud. With 82% of misconfigurations caused by human error and organizations managing 100+ cloud accounts, CSPM automates what’s mathematically impossible to do manually. The market will reach $15.6 billion by 2032.

2. Cloud Access Security Brokers (CASB) | 25.82% CAGR | $1.5B → $5.8B

Here’s a reality check. Enterprises average 112 SaaS applications, but shadow IT, or unauthorized apps, accounts for 42% of all applications. IT remains unaware of one-third of the apps on its networks. The damage? 65% of shadow IT companies suffer data loss, and 52% experience breaches. CASBs transform this chaos into visibility and control.

3. Zero Trust Network Access (ZTNA) | 23.25% CAGR | $1.6B → $5.6B

ZTNA kills the VPN model. Instead of network access, it provides application-specific connections verified for every request. Gartner predicts 70% of new remote access deployments will use ZTNA by 2025. With 65% of companies planning to replace VPNs, this shift represents a wholesale rethinking of secure access. The perimeter-based model is dying. Good riddance.

4. Cloud Workload Protection Platforms (CWPP) | 22.78% CAGR | $3.9B → $13.5B

CWPP platforms secure everything from traditional VMs to containers that exist for milliseconds. Legacy endpoint security can’t protect ephemeral containers or serverless functions—it wasn’t designed for workloads that appear and disappear in seconds. The shift to microservices demands purpose-built security.

5. Consent and Preference Management | 22.39% CAGR | $0.5B → $1.7B

GDPR fines reached €5.88 billion by January 2025, according to the DLA Piper GDPR Fines and Data Breach Survey. California’s CCPA penalties continue climbing; the California Privacy Protection Agency fined Todd Snyder $345,178 for inadequate opt-out and privacy request processes. Manual handling can’t meet regulatory deadlines. Automation prevents massive fines.

6. Threat Intelligence | 22.17% CAGR | $1.8B → $5.8B

IBM data shows threat intelligence reduces detection and escalation costs by $1.63 million while cutting incidents by 30%. Modern platforms aggregate data about bad actors and vulnerabilities, transforming raw threat data into automated responses across security stacks. The days of threat feeds sitting in dashboards, unused, are over.

7. Subject Rights Request Automation | 16.53% CAGR | $0.8B → $2.1B

When users demand “delete my data,” these platforms automate the process across all systems. Manual handling doesn’t scale, not when you’re managing requests across multiple jurisdictions with different requirements and tight deadlines.

8. Tokenization | 14.26% CAGR | $1.0B → $2.2B

Tokenization replaces sensitive data with meaningless tokens that can’t be mathematically reversed. Why the urgency now? NIST standardized quantum-resistant algorithms, including ML-KEM (formerly CRYSTALS-Kyber), in August 2024. Organizations are preparing for quantum threats expected within five to ten years.

9. Network Detection and Response (NDR) | 14.05% CAGR | $1.6B → $3.5B

NDR platforms use AI to establish behavioral baselines and detect anomalies signaling compromise. Here’s the mindset shift: rather than hoping to prevent all attacks, innovative organizations invest in rapid detection that minimizes damage when sophisticated attackers inevitably get through. Prevention isn’t enough anymore.

10. Vulnerability Assessment | 13.98% CAGR | $2.6B → $5.7B

Cloud infrastructure changes constantly. Quarterly scans are obsolete before they finish. Modern platforms provide continuous scanning in CI/CD pipelines, prioritizing based on real-world exploit data. DevOps teams deploying daily need vulnerability detection that keeps pace. Anything less is theater.

11. Endpoint Protection Platform (EPP) | 13.61% CAGR | $13.5B → $29.1B

The largest category doubles to $29.1 billion as ransomware attacks surge. According to Cyble analysis cited by TechTarget, U.S. ransomware attacks increased by 149% year-over-year in the first five weeks of 2025. Manufacturing led targets with 638 attacks in 2023, per Statista data compiled by Fortinet. Next-gen EPP uses behavioral analytics to stop ransomware before encryption begins—catching what traditional antivirus misses.

12. Secure Web Gateway (SWG) | 13.26% CAGR | $3.3B → $7.0B

Malicious sites appear and disappear in hours. Cloud-delivered SWGs update threat intelligence in real-time, protecting remote workers wherever they connect. Integration with ZTNA creates comprehensive security that follows users across devices and locations. The old perimeter? It no longer exists.

13. Web Application Firewalls (WAF) | 11.93% CAGR | $2.0B → $3.8B

Organizations expose hundreds of APIs, each a potential attack vector. Traditional network firewalls can’t inspect application-layer attacks. Modern WAFs use machine learning to distinguish legitimate users from attackers without blocking customers. Getting that balance right is harder than it sounds.

14. Encryption | 11.90% CAGR | $1.0B → $2.0B

NIST’s standardization of quantum-resistant algorithms signals urgency. Attackers already practice “harvest now, decrypt later”—collecting encrypted data for future quantum decryption. Organizations must transition to post-quantum cryptography now, as full integration takes years. This isn’t theoretical risk anymore.

15. Security Information and Event Management (SIEM) | 11.74% CAGR | $5.8B → $11.3B

AI transforms SIEM from reactive to proactive. Organizations using AI-powered automation save $1.9 million per breach, according to IBM’s newsroom. Machine learning models identify attack patterns and detect zero-day threats before signatures exist, turning security operations into a competitive advantage.

The Investment Thesis behind the numbers

These growth rates reflect three converging realities:

  • Cloud Complexity Is Exponential. With 79% of organizations using multiple cloud providers and managing hundreds of accounts, manual security is mathematically impossible. The 31.23% CAGR for CSPM isn’t optimism, it’s survival.
  • AI Changes Everything. Shadow AI breaches cost $4.63 million, $670,000 more than standard incidents. But AI also powers the defense, with automated security tools reducing breach lifecycles by 80 days. The same technology that creates vulnerabilities offers the best defense.
  • Compliance Costs Are Skyrocketing. Between GDPR, CCPA, and emerging regulations, manual compliance is a liability that grows daily. Automation platforms turn regulatory requirements into competitive advantages.

The Bottom Line

The organizations winning this race aren’t those with the most significant security budgets; they’re those investing in the right categories at the right time. These fifteen segments aren’t just growing fast; they’re defining what modern security architecture looks like.

The message from Gartner’s data is unambiguous: security spending is shifting from reactive to proactive, from manual to automated, from perimeter-based to zero-trust. Organizations still relying on legacy approaches aren’t just falling behind; they’re accepting risks that the market has already priced as unacceptable.

Source: Gartner Information Security Forecast 3Q25 Update (Document G00839334), showing overall market growth from $215.8B (2025) to $322.2B (2029) at 10.55% CAGR

Oct 28

Top ten cybersecurity startups to watch in 2025 according to $3.21B in investor bets

Top Ten Cybersecurity Startups to Watch in 2025 According to $3.21B in Investor Bets

While the industry still debates whether AI will transform cybersecurity, investors have already made up their minds.

Based on an analysis of the latest Crunchbase data compiled recently that spans January 2024 to October 2025, ten standout startups captured $1.41 billion in new funding, signaling that machine-speed defense against AI-driven threats is no longer optional; it’s an operational reality. Together, these ten startups have raised $3.21 billion, which represents one of the heaviest capital concentrations in cybersecurity startups to date.

Investors are gravitating to cybersecurity startups that solve complex problems

CrowdStrike’s Falcon 2025 event, held earlier this year in Las Vegas, showcased a series of new agentic AI developments that, taken together, reflect how cross-platform and cross-competitor collaboration aimed at shutting down increasingly complex weaponized AI threats leads to faster innovation. VentureBeat’s analysis of the many announcements there explains how the cybersecurity company is betting on agentic AI to defeat adversaries.

Interested in quantifying how AI is impacting investors’ decisions, I completed an analysis using Crunchbase data covering 342 verified cybersecurity startups with active funding. Selection was weighted toward recent momentum, total funding scale, stage maturity, AI integration, and proof through multiple rounds.

The key takeaway: Institutional capital is consolidating around companies that make autonomous security practical, and agentic AI is at the core of that direction. But AI is not enough; investors are looking for the ability to scale in enterprises once they have AI integrated into their core platforms.

AI in cybersecurity: Tablestakes, not a ticket to premium valuation

Sixty percent of startups integrate AI into their core technology. Yet contrary to hype, that hasn’t bought them higher valuations.

  • AI-integrated startups average $283M in funding.
  • Non-AI specialists average $378M.

Crunchbase data shows investors reward defensible specialization as much as AI capability. Quantinuum’s $925M for post-quantum cryptography and Zama’s $139M for homomorphic encryption prove that solving foundational security problems often supersedes AI as a differentiator.

Still, AI holds weight in investment decisions. Six AI-driven startups pulled $1.70B (52.8%), while four non-AI companies captured $1.51B (47.2%). Both models earn trust by underscoring AI for operational speed and deep tech for architectural resilience. And with seven of ten now at Series B maturity, investors are backing platforms that have already demonstrated enterprise traction, not experiments.

1. Quantinuum ($925M, Series B) Post-Quantum Defense. Closed a $600M Series B in August 2025. The company is building the only mathematical safeguard against the inevitable collapse of RSA and ECC encryption under quantum computing.

2. Saronic ($845M, Series B) Autonomous Maritime Security, Raised $175M in July 2024 for AI-powered unmanned surface vessels. With 90% of trade moving across exposed waterways, Saronic brings AI defense to the physical infrastructure that most enterprises overlook.

3. Auradine ($314M, Series B) AI Silicon for Security. Raised $80M to expand custom silicon that accelerates cryptographic workloads 10x faster than general-purpose hardware, eliminating bottlenecks in AI-driven security deployments.

4. Tines ($271M, Series B) No-Code Automation. Secured $50M Series B. Turns analysts into automation builders, saving 40+ hours weekly with drag-and-drop workflows that are proving critical for overextended SOC teams.

5. Dream Security ($198M, Series B) Critical Infrastructure Defense. Closed $100M in 2025. Their sovereign AI platform equips critical infrastructure with defenses calibrated to nation-state-level threats, providing a layer that traditional enterprise tools cannot reach.

6. Upwind Security ($180M, Series A)  Runtime Cloud Visibility. Raised $100M in December 2024. Focused on runtime intelligence, detecting abnormal behavior live rather than flagging static misconfigurations. Reduces false positives, elevates real threats.

7. Zama ($139M, Series B)  Homomorphic Encryption. Raised $57M in June 2025 after a $73M Series A in March 2024. Provides production-ready fully homomorphic encryption, enabling AI models to compute securely on encrypted data.

8. Noma Security ($132M, Series B)  Securing AI Agents. Closed $100M in 2025. Built to harden AI systems against prompt injection and model poisoning as enterprises push decision-making into autonomous agents.

9. ZeroEyes ($107M, Series B)  Firearm Detection AI. Raised $53M in 2025. Eleven rounds in, their AI models detect firearms on video feeds in seconds—cutting active shooter response time dramatically.

10. Upscale AI ($100M, Seed)  AI Networking Infrastructure. Raised a $100M Seed round in 2025. Building AI-native networking with hardware-accelerated encryption, aimed at high-performance compute environments.

The Bottom Line

Series B dominance (70%) shows that capital is flowing into platforms with market traction, not speculative bets. Forty-six rounds across these ten companies demonstrate durability and enterprise validation. The signal to security leaders is becoming clear based on the escalating nature of weaponized AI attacks: manual security processes are now liabilities. Defending at human speed against AI-enabled attackers is untenable. Investors understand this. $1.41B in recent capital confirms it.

Aug 25

Top Ten Insights from Forrester’s 2024 Cybersecurity Budget Benchmarks

Top Ten Insights from Forrester's 2024 Cybersecurity Budget Benchmarks

CISOs are being asked to do a lot more with less as their businesses are going all-in on new digital businesses that demand identity-based security while keeping budgets tight for securing infrastructure against attacks.

Cybersecurity budgets are, on average, just 5.7% of IT annual spending. That’s tight for many security teams. CISOs are rising to the challenge, however, and delivering revenue gains by protecting new digital businesses while keeping infrastructure safe. Achieving that is a quick way for CISOs to advance their careers.

Cybersecurity needs funding to match its business growth potential

The good news is that more CEOs and boards see cybersecurity as a business enabler. The challenge for CISOs, however, is that cybersecurity still gets funded purely for its defensive value – not its upside potential to drive growth.

Many security teams struggle to make ends meet in their budgets while still staying responsive to internal teams’ needs. Forrester’s 2024 Cybersecurity Benchmarks Global Report shows just how tight budgets can get for a CISO and their team. Project-related work and incident management are a constant balancing act for security teams, and keeping them both in check is key to staying under budget.

Top Ten Insights

Cybersecurity budgets are on the low side compared to the growing complexity of threats and risks organizations face.

That’s forcing CISOs to be selective about what they spend on and how they allocate limited resources. Add to that the average spend of $1,070 per enterprise user and $157,000 per cybersecurity employee, and cybersecurity teams have little, if any, room for inefficiencies.

The following are the top ten insights from Forrester’s latest cybersecurity benchmark report:

  • CISOs need to move out of the IT organization and report to their CEOs and board of directors to have a chance at a more realistic budget. Forrester finds that cybersecurity budgets increase when CISOs report directly to the CEO or board of directors. CISOs who can articulate the business value of cybersecurity, demonstrating how it can drive revenue and support strategic goals, are more likely to secure the necessary funding. This shift also reflects a growing recognition of cybersecurity’s strategic importance beyond mere IT operations.
  • Software will dominate cybersecurity budgets in 2024. The report reveals that 35.9% of cybersecurity budgets globally are allocated to software. This trend is particularly pronounced in large enterprises with up to 74,999 employees, where 39.4% of the budget is dedicated to software. Smaller organizations, conversely, spend a higher percentage on outsourcing services due to limited in-house capabilities, which underscores the scalability challenges smaller firms face in maintaining robust cybersecurity defenses.
Top Ten Insights from Forrester's 2024 Cybersecurity Budget Benchmarks

Source: Forrester 2024 Cybersecurity Benchmarks Global Report

  • Cybersecurity spending per user keeps climbing, reaching $1,070. This is another budget constraint CISOs have to factor into their total operations plans for a given year. Forrester notes that “the cybersecurity spend per enterprise user ranges from an average of $947 at extra-large organizations (75,000 or more users) to $1,210 at small organizations (fewer than 10,000 users).
  • Personnel costs consume 28% of the typical security budget. The report highlights that organizations are spending an average of $157,593 per cybersecurity employee. Full-time employees make up 73.5% of security teams, with the global average cost per contracted full-time equivalent (FTE) reaching $194,613. This significant expenditure on personnel underscores the critical role of skilled professionals in maintaining effective cybersecurity defenses.
Top Ten Insights from Forrester's 2024 Cybersecurity Budget Benchmarks
Source:  Forrester 2024 Cybersecurity Benchmarks Global Report
  • System Defense is the leading functional spend category in 2024. Forrester finds that 29% of functional spending is in System Defense alone. The funding levels approved for this category reflect the critical need to protect endpoints and mobile devices against increasingly sophisticated attacks. With adversaries innovating faster than enterprises can keep up, System Defense is a must-have to protect new digital businesses and infrastructure. The following graphic shows cybersecurity spending by functional domain.
Top Ten Insights from Forrester's 2024 Cybersecurity Budget Benchmarks
Source:  Forrester 2024 Cybersecurity Benchmarks Global Report
  • Identity and Access Management (IAM) takes up 21% of functional spending in the typical budget. Identity-driven attacks take many forms, from mass phishing to whale phishing, where senior executives of a company are targeted with tailored campaigns IAM also enhances operational efficiency and fraud reduction, making it a strategic investment for many organizations. Its broad applicability across both internal and customer-facing applications drives its substantial share of the cybersecurity budget.
  • Security analytics and incident handling reach 13% and 14%, respectively. Forrester notes that each of these separate services accounts for a relatively low percentage of the overall cybersecurity budget. Still, most organizations combine spending on these two categories into “detection and response.” Both areas combined equal 26% of the overall security budget, on average.
  • Getting compliance and governance right is a growing concern for many CISOs who are willing to spend their budget to stay in good standing with the SEC. The Security and Exchange Commission’s Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure adopted on July 26, 2023. The rules adopted by the SEC define a standardized process for cybersecurity disclosures for public companies. These rules require companies to disclose material cybersecurity incidents on Form 8-K or Form 6-K within four business days of determining the incident’s materiality. Additionally, companies must include cybersecurity risk management, strategy, and governance information in their annual reports (Forms 10-K and 20-F). The rules also mandate the use of Inline XBRL for tagging these disclosures.
  • Incident handling is on average, 13.5% of a global cybersecurity budget. This category is the most unpredictable, as it deals with responding to intrusions and breaches that cannot be forecasted. Spending on incident handling varies by company size, with small organizations (fewer than 10,000 employees) aligning with the global average of 13.5%. Larger organizations tend to allocate slightly less, likely due to more extensive preventative measures and diversified cybersecurity resources.
  • Privacy is core to customer trust today and gets funded, even in tough budgeting cycles. The two departments that use privacy-related solutions the most frequently are legal and marketing, which dedicate on average 12% of a cybersecurity budget to them. Forrester notes that this 12% figure is not the total privacy spend of an organization. Rather, the report says, “Data privacy spans multiple areas of the organization, including marketing and legal. Its share of the security budget doesn’t represent the total spending on privacy-related initiatives across the entire technology estate.

Balancing the scales of cybersecurity budgeting

The bottom line is that cybersecurity is a business decision and needs to be funded with that mindset. Organizations need to see the CISO role as a more board-level one so they can share their technology expertise in helping to manage risk.

It’s time for cybersecurity to be funded as a growth engine, not just one used for deterrence alone.

CISOs can balance the scales by looking for an opportunity to elevate their role to a CEO direct report and, ideally, be on the board to help guide their companies through an increasingly complex threat landscape.

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