AI isn’t the only factor dominating the cyber market. Here’s what CISOs should know about the industry’s evolutions, as top vendors fortify platform strategies, upstarts attract VC investment, and product categories blur and emerge.
AI is having a seismic impact on the cybersecurity market. Record-shattering amounts of venture capital is flowing into a new generation of startups focused on AI cybersecurity.
At the same time, established cybersecurity vendors are racing to integrate AI and agentic AI features into their platforms, triggering a surge in acquisition activity. But while AI is the most significant driver of cybersecurity market trends, it’s not the only one.
Here are the top cybersecurity market trends this year.
VC funding hits new highs
Global venture funding reached a record $510 billion in the first half of 2026, topping the $440 billion invested last year, according to Crunchbase. OpenAI and Anthropic accounted for $217 billion or 43% of that startup funding, but investors also poured billions into more than 5,000 other startups in the first half of 2026.
“Venture capital is concentrating into AI-enabled cybersecurity companies: 72% of US cyber deals through May 2026 involved an AI-enabled company,” according to John China, co-head of innovation economy at J.P. Morgan Commercial Banking.
Crunchbase predicts that 2026 “may be remembered not only as the year venture funding reached a new high, but as the beginning of a cycle in which record private investment and a functioning exit market reinforce one another,” leading to a new wave of public cybersecurity companies.
Here are three major 2026 VC deals involving cybersecurity companies:
- Keyfactor, which provides a trust infrastructure based on secure certificates and encryption keys for AI and machine identities, raised $1 billion in July.
- Cyera, which offers an AI-native data security platform, raised $600M in June, boosting its total amount of VC investment to $2.3B.
- Upwind Security raised $250M in January to support its runtime-first, cloud-native security platform.
See also: “10 promising cybersecurity startups CISOs should know about.”
New AI-centric product categories emerge
AI has created entirely new product categories. Gartner lists some of them as LLM security, prompt injection detection, model integrity, AI firewalling, AI governance, AI red teaming, and shadow AI discovery.
Prompt Security has built an AI security startup map that covers 367 companies. The breakdown, with companies potentially appearing multiple times, looks like this: AI observability and governance (239 vendors); runtime security and guardrails (188); agentic identity protection (89); MCP and LLM gateways (79); AI red teaming (78); AI-SPM (64); agentic data governance (63); and model security (52).
Richard Stiennon, who tracks cybersecurity vendors in his IT-Harvest database, has identified 21 distinct AI security categories, including SOC automation, governance, vulnerability management, guardrails, model security, deepfake defense, agent security, MCP security, and AI identity. There is no indication that the growth rate is slowing down. In June, Stiennon added 20 new AI security startups to his database.
Representative vendors include Noma Security, Hidden Layer, Zenity, Latera Guard, Rebuff, Vigil, LLM Guard, Vectra AI, 7ai, and Mindguard.
See also: “AI-SPM buyer’s guide: 14 tools to secure your AI infrastructure.”
Cyber M&A activity surges
For CISOs trying to make sense of the dizzying explosion of new AI-focused security tools, the traditional cybersecurity market leaders are filling gaps in their portfolios via acquisition.
Investment bank Momentum Cyber, which tracks cybersecurity M&A activity, reports that at the halfway point of 2026, there have been 219 transactions worth $9.1B, putting 2026 on pace for the highest deal count it has ever tracked and 11% above 2025’s record year.
For example, CrowdStrike bought SGNL to bolster identity security across human, non-human, and AI identities. Cisco bought agentic AI security vendor WideField Security, non-human identity security platform Astrix, and AI observability vendor Galileo. Check Point acquired Cyata, which provides governance of AI agents. Zscaler is buying AI and data security firm Symmetry Systems.
Palo Alto Networks is acquiring AI gateway startup Portkey, as well as Koi for its agentic endpoint security technology. 1Password has acquired Apono, which specializes in just-in-time access governance for humans, machines, and AI. A10 Networks bought TrojAI to add AI red-teaming and runtime protection to its security portfolio.
June was the strongest month of the year with 39 M&A transactions and $4.9B of disclosed value, signaling growing momentum toward larger, more transformative strategic outcomes in the second half, according to Momentum Cyber.
See also: “10 most powerful cybersecurity companies today.”
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Platform momentum grows
Despite the healthy VC market for startup security vendors, the overarching trend toward platforms remains unchallenged. Enterprise CISOs are certainly deploying specific point products to address security gaps, but they are also demanding tools that integrate with their broader platforms.
Gartner points out that enterprises that may have had 60 to 100 security tools are now targeting 20 to 30 integrated platforms. Vendors are responding by expanding into adjacent markets, such as endpoint security and identity management; SIEM and XDR; email and browser security.
The vendors with the strongest momentum in 2026 tend to share several characteristics: broad security platforms rather than single-purpose tools, AI-native automation and agentic capabilities, strong identity and cloud security integration, unified data architecture and outcome-focused messaging (reduced risk, faster response, measurable resilience).
“Conversely, vendors offering standalone products without differentiated AI, automation, or platform integration are under increasing pressure to consolidate, partner, or specialize,” Gartner says.
Forrester analyst Jess Burn puts it more bluntly: “It’s time to ditch standalone security tools that don’t integrate well or offer enough visibility. While single-function tools work for niche needs, relying too heavily on them creates inefficiencies — especially now that multipurpose platforms are more common. Focus instead on solutions that prioritize integration, automation, and productivity.”
See also: “6 tips for consolidating your IT security tool set.”
Quantum security gets real
Threats posed by attackers using quantum computing to break public-key encryption have seemed like something CISOs could put on the back burner and deal with at some point in the future. But that future has arrived, and the vendor community is now offering tools to help enterprises identify potentially vulnerable datasets, and to migrate to quantum-safe environments.
The “harvest-now, decrypt later” approach taken by potential adversaries has created an urgency to protect sensitive data. And US President Donald Trump signed an executive order in June signaling the federal government’s effort to accelerate quantum security. The order calls for a nationwide transition to post-quantum cryptography by 2031.
Gartner analyst Alex Michaels says, “Post-quantum cryptography alternatives must be adopted now to avoid potential data breaches, legal liability, and financial loss from ‘harvest now, decrypt later’ attacks targeting long-term sensitive data.”
Some of the leading vendors in the emerging quantum security market include SandboxAQ, QuSecure, Post-Quantum, Quintessance, and Fortanix. In addition, familiar faces such as IBM, Palo Alto Networks, Microsoft, Cisco, and Google are offering or developing protections against quantum-based attacks.
See also: “The CISO’s guide to establishing quantum resilience.”
Managed security services (MSS) gain momentum
The largest cybersecurity transaction in 2026 so far was Accenture’s $4.175B acquisitions of Dragos, NetRise, and runZero. Accenture’s goal is to create a unified cybersecurity platform to protect critical infrastructure, including industrial control systems, IoT, sensors, and cloud-connected devices — and to offer that protection as a managed service.
Accenture’s entry into managed security services is an attempt to offset softness in its consulting business, according to analysts, but also reflects the fact that managed security services is a hot growth area.
“Cybersecurity is being reshaped by expanding attack surfaces, AI-enabled threats, and intensifying regulatory scrutiny. Managed security services (MSS) are reflecting this momentum, with spending expected to rise from approximately $35.6 billion in 2025 to over $52 billion by 2028,” according to Frost & Sullivan.
GrandView Research says that enterprises are turning to managed services for advanced threat intelligence, round-the-clock monitoring, incident response, and vulnerability management. “The services segment is witnessing robust growth as organizations prioritize agility, expertise, and scalable cybersecurity capabilities to safeguard critical data, ensure regulatory compliance, and strengthen overall resilience against sophisticated cyberattacks,” according to GrandView.
The market for managed cybersecurity services is rapidly expanding on two fronts. There are pure-play MSS vendors such as Arctic Wolf, Huntress, and SentinelOne. In addition, established vendors such as Dell, Microsoft, Cisco, Palo Alto Network, and others are delivering managed detection and response (MDR).
See also: “Top 12 managed detection and response solutions.”
The rise of data security posture management (DSPM)
The market has stepped up to meet the growing need for a holistic approach to securing data with a product category called data security posture management (DSPM). These tools discover, classify, and secure data across environments and use cases.
“In today’s landscape of expanding data assets, the use of AI, and evolving data breach threats, data security posture management tools are in high demand,” says Gartner analyst Jaimie Anderson.
Krista Case, research director at Futurum Group, adds, “DSPM is increasingly central to how organizations think about visibility and control over sensitive data in hybrid, multi-cloud environments.”
As often happens when a product category takes off, startups lead the way and established vendors start snapping them up. In the DSPM market, Palo Alto bought Dig Security, IBM bought Polar Security, Thales bought Imperva, Rubrik bought Laminar, Proofpoint bought Normalyze, Commvault bought Satori, Veeam bought Securiti, and so on.
This gives CISOs plenty of choices from among their platform partners, but there are still a number of independent DSPM players such as Cyera, Skyhigh, BigID, Concentric, and Sentra.
“The future looks bright for DSPM,” says Omdia Research analyst Adam Strange, adding, “DSPM has both critical mass and momentum.”
See also: “DSPM buyer’s guide: Top 10 data security posture management tools.”