Palo Alto’s new Google Cloud deal boosts AI integration, could save on cloud costs

December 22, 2025 TH Author

Security vendor Palo Alto Networks is expanding its Google Cloud partnership, saying it will move “key internal workloads” onto the Chocolate Factory’s infrastructure. The outfit also claims it is tightening integrations between its security tools and Google Cloud to deliver what it calls a “unified” security experience. At the same time, Palo Alto may trim its own cloud purchase commitments.

With Palo Alto committed to spending at least $6.3 billion over the next few years on cloud services alone through 2031, according to SEC filings, the deal appears to be a massive win for Google over rivals AWS and Microsoft Azure.

In a press release on Friday, Palo Alto Networks said it was expanding its commitment to run its security platforms on Google Cloud’s “secure, trusted AI infrastructure by migrating key internal workloads to Google Cloud in a new multibillion-dollar agreement.”

In August, Palo Alto’s Chief Financial Officer Dipak Golechha said that the company was negotiating “favorable procurement arrangements as the scale of our cloud host products continues to grow,” during the fiscal year end earnings call.

At the time, Palo Alto stated that it planned to spend $145 million in cloud purchase commitments in fiscal year 2026, and $774 million in cloud purchase commitments in fiscal year 2027.

Three months later, Palo Alto said it expects to spend just $660 million on cloud purchase commitments in 2027, a $114 million drop from its prior estimate. It also said it will spend $60 million in the remainder of fiscal 2026 (which goes through July 31), but did not indicate how much it had already spent in its first quarter. Estimates for 2028, 2029, and 2030 remained similar to the earlier report.

Palo Alto’s cloud purchase commitments are ramping quickly, according to its financial data. In 2028, it expects to spend $998 million, then $1.01 billion in 2029, $1.14 billion in 2030, and it has budgeted about $2.5 billion for 2031 and beyond. We don’t know what percentage of these expenses go directly to Google Cloud, but this announcement leads us to believe it would be a significant share.

We reached out to Palo Alto Networks’ Investor Relations to ask if the change in 2027 fixed costs came from potentially getting a better deal with Google or some other reason. Neither Google nor Palo Alto Networks responded to requests from The Register for comment.

“We continue to be pleased by the continued growth of our SaaS offerings and remain actively engaged in executing cloud cost efficiencies,” Golechha said during a November earnings call.

Friday’s announcement contained no new products, but promised customers “deeper integrations” with Google, and Palo Alto said its hope is that their partnership would “accelerate Google Cloud adoption.”

In its release, Palo Alto Networks highlighted three key integrations that its customers would be able to take advantage of:

Palo Alto’s Prisma AIRS security platform will protect Google Cloud AI workloads, including those with Vertex AI and Agent Engine. It will even do AI Red Teaming and AI Model Security to look for vulnerabilities in your models.
VM-Series firewalls from Palo Alto will now have “deep integrations” with Google Cloud, so customers can do packet inspection and threat prevention.
Prisma Access, within its Prisma SASE platform, helps customers connect WAN infrastructure across multiple clouds and improve “the user experience” when accessing AI applications running on Google Cloud.

The company also said that its work with Google provides a unified experience with tools that work better together.

Palo Alto Networks also said it plans to power its copilots using Google Cloud’s Vertex AI platform and Gemini LLM.

According to a LinkedIn post by company president BJ Jenkins, the deal will also give Palo Alto accelerated market reach with a Google-led go-to-market strategy for key products like Palo Alto’s Prisma AIRS.

“We’re removing the friction between security and development, providing a unified platform where the most advanced security is simply a native part of building what’s next. Together with Google, we are embedding our AI-powered security deep into the Google Cloud fabric, turning the platform itself into a proactive defense system,” Jenkins said in a statement.

Meanwhile, cloud hosting service costs, which include both fixed and variable expenses, increased $48 million for the quarter that ended on October 31 versus the same quarter in the prior year, according to the November 10-Q form.

The company’s gross margin for the quarter was up one-tenth of a percentage point. ®