The Impact of AI, from Business Models to Cybersecurity, with Palo Alto Networks CEO Nikesh Arora

**Sarah Guo** (0:05)
Hi, listeners. Welcome back to No Priors. Today, we're here with Nikesh Arora, the CEO of Palo Alto Networks. He joined Palo Alto in 2018 when it was the next-gen firewall player and has since grown in it to six to seven times the size as a leader as a platform security company. Previously, he was the SVP and CBO of Google during its massive growth phase from 2004 to 2014 Welcome, Nikesh. Nikesh, thanks so much for being with us.

**Nikesh Arora** (0:32)
My pleasure.

**Sarah Guo** (0:34)
I don't know where to start because I want to talk about AI, I want to talk about security, I want to talk about leadership. I do think given your history growing Google as Chief Business Officer, like we have to ask you, what do you think is the future of search and how threatened is it?

**Nikesh Arora** (0:48)
Nothing like a slow little lowball, welcome me to your show and talk about it. This guy uses Google too at that point.

**Sarah Guo** (0:55)
But I talk to him too much.

**Nikesh Arora** (0:57)
What do you think?

**Elad Gil** (0:58)
I think we should defer the question to you as he excellent.

**Nikesh Arora** (1:00)
Oh, look at that. You don't know what to put in his own mouth. We do all the hard work. I think the idea when search came about, I still remember going out there and trying to sell search to people. It was the, oh my God, you mean I can just go to the Internet, type something and I can get the answer. We spent two decades trying to get all the information out there on the Internet, so it was easily accessible to people. I think you saw the benefits. You saw the benefits of democratization of information. Farmers in India could get stuff and people get information. I think now, we're in age, people are saying, great, don't give me all this stuff to sift through myself. Try and make sense of all of it for me because it's too much. That's what you're seeing in today's generative AI models.
So in my own words, I call that democratization of intelligence. All of us will have the basic intelligence which every other person next to us has because we can go figure it out. I don't have to hire the same people to solve the same problem for me, the 10,000th time and pay the money because it's already been solved 9,999 times. And the outcomes on the internet somewhere. So I think to the extent that Google has sharpened its sort of scales on putting all that information together, being able to synthesize it, understand it, being able to interpret my intention as an end user and try and present me the most likely outcome, I think that should translate well to the notion of generative AI being able to summarize the same thing in a much more enhanced order way for them. So I think from that perspective, will they have the ability to transition the current search product into a future product which is basically, call it what you want to call it, ask me anything or, and I think it's so funny, when you worked at Google 15 years ago, Larry had that vision. He used to talk about getting to a point where you answer my question, answer my intent as opposed to answer what I type. So he had the foresight to talk about that. He used to talk about AI. So I think from a product perspective, they are in a good position to be able to transition the product to what the end users need. And you've seen that with Gemini, you see that with ChatGPD, you see that with a lot of models which are getting to the same place. Let's not underestimate the distribution power they have. There are two or three companies in the world which have distribution of the billions, and whether it's Facebook with all their properties, or it's Apple with their properties, or Google with their properties. So they have the distribution, they have the product chops, they have the AI chops. I think the bigger question is, how does the business model transform from what it has been with 10 blue links and ads being represented against them, and what's the new monetization sort of that will come as a result.

**Elad Gil** (3:32)
Do you think it's likely to be agents or something else in terms of starting to take action?

**Nikesh Arora** (3:36)
Yeah, we can come there too, but I think because the search question, search is an advertising revenue question. So yes, the question is, how does the advertising revenue morph into some version of consumption or transaction metric, because that's the intent. When I go say, what are the best blue pants in the world? It's not just doing it for academic interest. I'm actually going to transact. So yes, maybe an agent could do this or the fastest flight to get to Rome. So the agent could do that. We'll talk about agents in a second. I think that's much more disruptive than generative AI. And to that extent, I think, how the transition, the business model is going to be interesting. I don't think anyone knows what the business model is, but all I can say is that having been there and admired what they do, they do spend time getting the product adopted first. And eventually, even though there is tremendous amounts of distribution for the product, you find a model emerges. I remember how for the longest of years, nobody quite knew how YouTube was going to make money. And everybody was looking at Netflix as the one who were making money in streaming, and YouTube wasn't. I think YouTube is a big-ass business now, compared to most of the streaming players in the world. So I think they'll figure out how that model transforms. I do think the agentic challenge is a much bigger challenge than the generative AI challenge.