Betting on AI cybersecurity, ServiceNow announces $7.75 billion acquisition of Armis.

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On Tuesday, U.S. enterprise cloud computing and service management solutions provider ServiceNow announced it will acquire cybersecurity startup Armis for $7.75 billion in cash, marking ServiceNow’s largest acquisition to date.

As a result, ServiceNow’s stock price fell as much as 3% in early Tuesday trading, potentially reaching the lowest closing price since April 21. The stock closed up about 0.9% on Monday, with a market capitalization of roughly $163 billion.

ServiceNow stated in its announcement that it plans to fund the deal through a combination of cash on hand and debt. The statement said the transaction is expected to close in the second half of 2026, subject to regulatory approval and other closing conditions.

Armis was founded by veterans of the Israeli military’s cyber intelligence unit. The company focuses on identifying and tracking security threats across devices and serves a wide range of industries including healthcare, financial services, and defense.

In early August, Armis CEO Yevgeny Dibrov said the company’s annual recurring revenue had reached $300 million, up from $200 million a year ago. Armis recently completed a $435 million funding round, valuing the company at $6.1 billion, and had previously planned to pursue an initial public offering (IPO) by late 2026 or early 2027.

ServiceNow: Acquisition Will Triple Market Opportunity

ServiceNow offers software to help enterprises organize and automate their human resources and IT operations, and has grown into a leading platform in the enterprise workflow space. In March, ServiceNow agreed to acquire artificial intelligence (AI) company Moveworks Inc. for $2.85 billion as part of its strategy to develop AI tools that perform tasks without human supervision.

The company stated that this acquisition will expand its market opportunity in security and risk solutions to three times its current size, further strengthening its position in the AI security market.

“As the rapid adoption of AI expands the attack surface for enterprises, the ability to get real-time visibility into vulnerabilities and actionable insights on which issues to prioritize for remediation is crucial for reducing risk and strengthening overall security posture.”

ServiceNow President, Chief Operating Officer and Chief Product Officer Amit Zavery said in Tuesday’s statement:

“ServiceNow is building the security platform of the future.”

“In the era of agent-based AI, if enterprises want to deploy AI at scale and over the long term, it is essential to establish an intelligent trust and governance system covering any cloud environment, any asset, any AI system, and any device—this is non-negotiable.”

In a media interview, Zavery said that after the deal closes, ServiceNow will integrate Armis’s threat protection service data into its broader cybersecurity product suite to enhance customers’ ability to defend against cyberattacks. He said:

“We will use this information for monitoring and build security operations around it. For customers, we’ll be able to provide alerts and incident management, and carry out graded response to ensure such incidents do not recur.”

The Armis acquisition comes as a wave of M&A sweeps the cybersecurity industry, driven by the increasing use of AI for identifying hacker threats. In March, Google’s parent company Alphabet Inc. agreed to acquire cloud security company Wiz Inc. for $32 billion in cash. In July, Palo Alto Networks Inc. agreed to acquire CyberArk Software Ltd., valuing the Israeli company at about $25 billion.

Investment firm Insight Partners acquired Armis for $1.1 billion in 2020, a deal that included other investors such as Alphabet’s CapitalG.

Previously, private equity giant Thoma Bravo had also considered a deal with Armis. In September, executives at the startup said they were weighing some six to seven investment offers at the time.

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