AI TRENDS | CrowdStrike to Acquire Two AI Security Startups for $495 Million

CrowdStrike has agreed to acquire two AI security startups for a combined $495 million, expanding its capabilities to monitor AI agents and manage their risks. According to Sina Finance, CrowdStrike will pay about $400 million for Fiddler AI, a Palo Alto, California-based company founded in 2018 that develops software to monitor and explain agent behavior, and about $95 million for Dreadnode, an automated security testing platform founded in 2023 that detects vulnerabilities in AI models before deployment. Most of the purchase price will be paid in cash, with the remainder in restricted stock subject to vesting conditions. Dreadnode will scan models and agents for weaknesses before deployment, while Fiddler will track agents’ decisions, tool calls and interactions after launch. CrowdStrike plans to offer Fiddler’s capabilities as Falcon Observe, complementing a newly introduced emergency shutdown feature in Falcon Guardian that lets administrators terminate agents exhibiting abnormal behavior. CrowdStrike President Michael Sentonas said businesses have moved beyond testing and are deploying AI agents at scale. He said misconfigurations, insufficient understanding of how agents operate and excessive permissions can expose systems and data to risk. Regulators are beginning to require businesses to explain agents’ permissions and controls, making audit trails of agent operations and decision-making a compliance requirement. CrowdStrike plans to integrate Fiddler and Dreadnode into its Falcon platform early next year.