CrowdStrike to shell out nearly $500M for 2 AI security startups as the market for securing agents takes off

Cybersecurity giant CrowdStrike is buying two AI security companies that expand its products to more broadly monitor, test, and cover AI models and agents, as companies across industries start rolling out AI agents and models wholesale.

CrowdStrike said it will buy Fiddler AI, which makes observability software for monitoring AI agents inside enterprises, and Dreadnode, which helps companies automate security testing specifically aimed at detecting flaws in AI models, apps and agents before they are set live.

The company is paying around $400 million for Fiddler AI, and about $95 million for Dreadnode, according to The Wall Street Journal.

The deals are happening at a time of significant upheaval in the cybersecurity space, especially as companies’ policies and processes lag behind AI adoption within their walls. Teams and individual employees alike are experimenting with AI tools, automating workflows, vibe-coding custom apps, and deploying armies of AI agents to do their bidding, which is understandably causing headaches for security teams.

CrowdStrike, whose products are used widely across enterprises and governments, is clearly trying to leverage its already significant heft and presence to capture a share of this quickly burgeoning market. It’s not alone, of course, as we’ve already seen several startups and cybersecurity vendors raising dozens of millions in funding to solve issues for companies, though most of these approaches are essentially based on the conviction that existing security software isn’t enough to monitor and control AI tools, connectors, or usage.

The company has itself been building detection and response controls, dubbed Falcon Guardian, to help companies see and understand what agents are doing on their devices, and these acquisitions seem to further flesh out its offerings.

Fiddler AI is going to be part of CrowdStrike’s Falcon platform as Falcon Observe, where it’ll ostensibly help the company’s clients evaluate agents before they’re deployed, understand their actions, and monitor what they do, and feed that information as telemetry into the broader platform. Dreadnode, meanwhile, will be integrated into the Falcon Guardian product, to which the startup’s software will feed its testing results as security policy recommendations.

Founded in 2018, Fiddler AI has raised a total of about $99 million to date, according to PitchBook. Dreadnode, founded in 2023, has raised $14 million so far.