This story is part two of our series on artificial intelligence startups and their impact on multiple sectors. Over the last decade, we analyzed VC investment in artificial intelligence. The third part explores the promise of artificial intelligence. Christine Kilpatrick is a Special Projects Editor.
As applications for the technology in the sector have grown, so has investor interest in the use of artificial intelligence in the cybersecurity sector.
Increased processing power has led to the expansion of the security uses of artificial intelligence and investors have invested billions of dollars in the past few years.
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According to the data, a record $2.1 billion was invested in VC-backed companies that use artificial intelligence. The second year in a row investors put more than $1 billion into the coffers of such startups.
Cyber startups that use artificial intelligence are on pace to secure about a billion dollars of investment, despite this year being a downer compared to last.
Big rounds
There have been a number of nine-figure rounds for cyber startups using artificial intelligence.
- In February, Palo Alto, California-based Salt Security, an API protection platform that prevents attacks using machine learning and AI, closed a $140 million Series D round led by Alphabet’s CapitalG at a $1.4 billion valuation.
- Switzerland-based AI-powered smart contract platform Velas raised a $135 million round in September.
- In January, Austin, Texas-based SparkCognition, an AI startup that analyzes complex data stores, closed a $123 million Series D.
Threats and automation
Although artificial intelligence is used in cybersecurity, it is usually associated with pattern matching in areas such as threat detection, as well as helping automate decisions in security operations.
While artificial intelligence may not be the panacea for all cybersecurity concerns, it does help us with exponentially growing datasets, hyperscale attacks, identifying unknown attacks that can’t be detected via signatures, and also address efficiency challenges in an industry that has been plagued with a talent shortage for years.
The co- founder and managing director of Forgepoint Capital said that embedded artificial intelligence has had the biggest impact on both automation and ability to recognize rules in cybersecurity.
TruEra, an automation and observability startup, and Attivo Networks, an identity detection firm, are both using artificial intelligence in their platforms.
It’s applied to automation all the time, especially in the security operations center. It is pervasive, according to Yépez.
He says the space has expanded with use cases of the artificial intelligence variety.
Australia-based Secure Code Warrior uses the technology to write better software code and San Francisco-based CyberCube applies artificial intelligence to cyber insurance. There are growing possibilities in both of them.
“I think we are using it more and more,” Yépez said. The power of processing has helped that.
Not quite there yet
There is no doubt about it, there is still a long way to go before the full capabilities of the technology are realized in cyber.
Stephen Ward said the industry still confuses machine learning and artificial intelligence as the same thing, which they are not.
Ward said that security is in the automation space and not the artificial intelligence space.
Some companies, including San Francisco-based email security firm Abnormal Security, have used Artificial Intelligence effectively in the industry, but the talent is not yet in cyber for most to harness its power.
He said that they don’t have the experts in it yet. In two to three years we will be there.
While companies such as CrowdStrike have used machine learning to help become large security companies, Ward said he has not seen companies do the same with artificial intelligence yet.
Embedded artificial intelligence has a long way to go before it can reach its full potential, according to Yépez. Even though processing power has improved, most companies still don’t have a way to make it easier to use.
There is still a factor that is important.
There is a question about responsible Artificial Intelligence. We aren’t comfortable enough with the decisions that Artificial Intelligence makes for us.
Methodology
The industries of network security, cloud security, identity management and cybersecurity are included in the definition of cybersecurity. The database shows the most announced rounds.
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You can keep up to date with recent funding rounds with the Crunchbase Daily.