Palo Alto Networks Closes Portkey Acquisition, Adds AI Gateway to Prisma AIRS for Agent Security

Palo Alto Networks closed its acquisition of Portkey on May 29, folding the AI gateway startup into its Prisma AIRS security platform as a centralized control plane for managing autonomous AI agent traffic. The deal, which The Economic Times reported values Portkey at $120-140 million in cash and stock, makes the AI gateway a core enforcement layer for every agentic interaction running through an enterprise’s infrastructure.

What Portkey Does

Portkey’s AI gateway sits between applications and large language models, routing requests, monitoring token usage, and enforcing access controls on agent traffic. According to the company’s press release, the gateway already processes trillions of tokens per month for several Fortune 500 customers and can be implemented with three lines of code.

Founded in 2023 by Rohit Agarwal and Ayush Garg, Portkey raised $15 million in February 2026 in a round led by Elevation Capital at a $60-70 million valuation, according to The Economic Times. The acquisition roughly doubled that valuation within four months.

Integration With Prisma AIRS

Inside Prisma AIRS, the gateway will serve three functions: runtime security (inspecting all AI traffic to detect agent-based threats), agent identity security via Idira (authenticating every agentic interaction to prevent unauthorized tool use and lateral movement), and AI observability via Chronosphere (providing telemetry on AI workload performance at production scale).

“AI agents have become privileged insiders, reasoning and executing on behalf of users and companies,” CEO Nikesh Arora wrote in a LinkedIn post cited by The Economic Times. “You cannot build an agentic enterprise without a centralised control plane to secure it.”

Lee Klarich, Chief Product and Technology Officer, framed the acquisition as solving a binary choice enterprises currently face. “Organizations often feel forced to choose between two failing strategies: scrambling to integrate a patchwork of ‘point products’ to stay current, or falling behind while waiting for legacy platforms to catch up,” he said in the blog announcement.

The Broader Security Land Grab

Portkey is Palo Alto Networks’ ninth acquisition since 2021 and follows the $25 billion CyberArk deal completed in February 2026, which targeted human, machine, and agentic identity security. The back-to-back acquisitions reflect a thesis that the agent security stack requires both identity infrastructure (CyberArk) and traffic-level governance (Portkey) to function.

The competitive field is dense. CrowdStrike launched Charlotte AI AgentWorks for endpoint agent governance. Okta shipped “Okta for AI Agents” in April with lifecycle controls treating agents as governed identities. SentinelOne introduced Prompt AI Agent Security for real-time discovery and policy enforcement across MCP servers. Each vendor is converging on the same premise: agents need to be treated as privileged users with auditable permissions, not just software running behind a firewall.

According to Gartner data cited by Palo Alto Networks, 81% of enterprises are now either piloting or fully implementing AI agent solutions. The security infrastructure to govern those agents is still catching up.

The $140 Million Question

Portkey’s valuation doubled in four months on the strength of its enterprise traction and the timing of the agent security wave. For Palo Alto Networks, the bet is that owning the gateway layer, where all agent traffic passes through, creates a natural enforcement chokepoint that competitors will struggle to replicate without similar acquisitions. For the startups building agents, it means one more layer of enterprise infrastructure they will need to integrate with before their agents reach production.