Cybersecurity M&A hits a new record... AI and cloud computing are changing the landscape

The cybersecurity market will reach its largest boom in history in 2025, signaling that 2026 will be a year of even fiercer competition. According to the annual report by Momentum Cyber, the M&A scale in the cybersecurity field last year reached $102 billion (approximately 146.8 trillion KRW), setting a new record high. A total of 398 M&A transactions were completed, representing a 21% increase in deal volume year-over-year, with transaction amounts soaring by 294%.

Especially on a quarterly basis, the second quarter saw the highest number of completed deals, while the third quarter featured a massive transaction totaling $44.2 billion (approximately 63.6 trillion KRW), setting a quarterly record for the largest deal size. The dominant sectors in these transactions were cloud security and identity authentication platforms, reflecting the market’s strong focus on channel-integrated security solutions.

The report highlights a significant trend toward software-centric M&A. SaaS-based security companies accounted for about 60% of total deal volume, and 96% of total investment was concentrated in these companies. This is interpreted as a clear signal that the market is especially willing to pay high premiums for cloud-native platforms and integrated security architectures. Architectures that tightly integrate authentication, access control, and threat detection functions are becoming a strong competitive advantage.

The nature of acquiring entities also shows a different trend from the past. In 2025, strategic acquirers accounted for 91% of total deal value and 61% of deal volume, dominating the market. Just the previous year, private equity funds were very active, but this year, large-capital companies with substantial resources have established a clear advantage in key categories. Especially in cloud security and identity authentication, strategic acquirers have made decisive acquisitions even at high valuations, leading to a significant upward revision of asset valuation standards within the market.

In terms of subfields, security services, risk and compliance, digital channel security, and identity authentication ranked highest in deal volume. In terms of deal value, cloud security and identity management technologies held a monopolistic position. Notable cases include Google’s acquisition of Wiz and Palo Alto Networks’ acquisition of CyberArk, with deal sizes reaching $32 billion (approximately 460.8 trillion KRW) and $25 billion (approximately 360 trillion KRW), respectively.

Meanwhile, the landscape of fundraising has also shifted around AI security. According to Momentum Cyber, AI security has now established itself as the fastest-growing submarket within cybersecurity. In 2025, a total of 734 funding rounds were completed, raising $18 billion (approximately 25.9 trillion KRW), a 37% increase from the previous year. Notably, 57 deals exceeded $50 million (approximately 720 billion KRW), with investments concentrated in AI security, data security, and application security.

Momentum Cyber predicts that the growth momentum will continue into 2026. Demand is expected to remain strong not only for AI platforms but also for cloud-centric security architectures and compliance automation tools. Many companies are accelerating the integration of their own AI, reaching a point where a fundamental rebuild of security systems is necessary.

Senior analyst Richard Steinnon( from Momentum Cyber stated, “In the era of generative AI, security can no longer be reactive, intermittent, or lagging behind human speed.” He emphasized, “AI security has risen to become a core issue within the industry, rather than a marginal topic.” He also added, “The key guardians of this era will be those who understand that AI should be viewed as a pillar of the digital economy, not just a technology.”