Cato Networks is reportedly acquiring AI cybersecurity firm Aim Security.

In what would be Cato’s first acquisition to date, Calcalist reported the Tel Aviv-based vendor is in advanced talks to acquire the firm for around $350-400 million.

Also based in Tel Aviv, Israel, Aim Security specializes in securing enterprise use of generative AI and large language models (LLMs).

Founded in 2022 by veterans of Israel’s Unit 8200 cyber intelligence agency, Matan Getz and Adir Gruss, the firm has secured roughly $28 million in total through two financing rounds. Its backers include YL Ventures, CCL (Cyber Club London), the founders of potential Google acquisition Wiz, and angel investors affiliated with Google, Proofpoint, and Palo Alto Networks.

Cato Networks currently leverages AI to enhance its Secure Access Service Edge (SASE) platform through threat detection and policy automation.

Upon completion of the deal, the platform would integrate Aim's specialized AI governance capabilities, with a focus on shadow AI and AI agents.

The low-key, unmanaged usage of AI apps in an organization, aka shadow AI, can lead to unsanctioned and invisible data leaks.

That networking threat has seen a response from CloudFlare, which this week updated its zero trust service with AI Security Posture Management (AI-SPM) integration in a bid to tackle shadow AI. Rivals such as Zscaler, Palo Alto, and CrowdStrike already offer similar services.

Almost inversely, the AI agent problem relies not on employees using unauthorized AI apps within enterprise settings – but on AI ‘employees’ deployed by an organization.

Cisco recently suggested to SDxCentral that the growing number of AI agent deployments will become equivalent to “80 billion” users, posing an identity challenge for networks in the future. In turn, vendors such as CrowdStrike have released recent solutions to identity agents on the network, similar to Aim’s.

Cato, meanwhile, received recognition for its agentic AI plans from Gartner in the analyst firm’s latest SASE provider rankings.

Cato Networks to date

By making its first acquisition, Cato Networks is proceeding with its scale-up expansion.

Founded in 2015, the firm achieved unicorn status following an October 2021 funding raise.

Cato then raised $359 million in a funding round in June, securing backing from the likes of Vitruvian Partners and ION Crossover Partners to take its valuation to more than $4.8 billion.

The investment was made to expand Cato into AI use cases across IoT security, SD-WAN, and zero-trust network access (ZTNA).

Earlier this year, Cato integrated Amazon Bedrock into its SASE Cloud platform, allowing users to develop custom foundation models.

Most recently, the firm named Eyal Heiman as its chief technology officer, with Heiman coming across from Akamai Technologies.

Timelines have yet to be disclosed regarding the completion of the Aim Security deal.