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Cybersecurity threats are rising fast — and AI is making them harder to contain.
“It’s becoming much easier to attack a company,” Zscaler (ZS) CEO Jay Chaudhry told Yahoo Finance Executive Editor Brian Sozzi on the Opening Bid podcast (see the video above; listen in below).
Chaudhry added that generative AI tools like OpenAI’s (OPAI.PVT) ChatGPT and Google’s (GOOG) Gemini can now quickly surface vulnerabilities in corporate systems that once took weeks of research to identify. That puts enterprises on the defensive — and they can only counter with similar technology.
“To fight AI, you must fight it with AI,” Chaudry said.
Cybersecurity stocks have been some of the hottest trades on Wall Street. Zscaler shares are up over 57% year to date, while Palo Alto Networks (PANW) and CrowdStrike (CRWD) have also surged, suggesting that investors are betting AI will drive new demand for advanced security systems.
The rise of generative AI agents adds another layer of uncertainty. While much of the industry chatter focuses on AI agents for business use, Chaudhry said the technology is still in its infancy.
However, security challenges may multiply once agents become widely adopted.
“The challenge of cybersecurity and data protection becomes 10x bigger,” he said.
For Zscaler, that opens both risks and opportunities. The company currently has over 50 million users and utilizes a “zero trust exchange,” a cloud platform that securely connects users, apps, and devices. Chaudhry said the same architecture can be extended to govern AI agents as they interact with one another and with enterprise systems.
Beyond corporate networks, Chaudhry explained that banks and big financial institutions have made major strides in security, but utilities and infrastructure like the water system and electric grid remain dangerously exposed. He cited the Colonial Pipeline hack in 2021, which shut down fuel supplies across the East Coast, as an example of how quickly an attack could spiral.
“Our country could do a little bit more, push an incentive for our infrastructure, which has some significant risk because they still depend on old technologies,” he said.
Ransomware is another persistent threat. Zscaler’s latest threat report notes the company blocked about 146% more attacks year over year, its biggest spike in three years, while public extortion cases rose over 70%. Some of those adversaries, according to Chaudhry, range from Eastern Europe and China to the US.