Key Takeaways
- CrowdStrike fell 7% on Friday in an AI selloff, a day after OpenAI President Greg Brockman said security spending should far exceed spending on software.
- An AI arms race that never ends would widen CrowdStrike’s market well beyond the security budgets that analysts’ estimates are built on.
- Brockman said OpenAI moved about 25% of its production engineers onto security, and he named CrowdStrike as a partner.
- The risk is price: CrowdStrike trades at 161x forward earnings, well above its three-year average of 102.5x.
CrowdStrike (CRWD) fell 7% on Friday as AI stocks sold off.
The timing was strange. A day earlier, OpenAI co-founder and president Greg Brockman went on the No Priors podcast and made the most bullish case for security spending I’ve heard from outside the industry:
“Cyber spend, security spend, should actually vastly outstrip software spend.”
Even the show’s own intro called that “quite a claim.”
His reasoning: AI is making software so cheap that the value moves to code you can trust. In his words, “You want software that is reliable, that is secure, that you can believe in.”
The labs also say the threat is already here. Logan Graham, who leads Anthropic’s Frontier Red Team, said on the MTS podcast that this year “we’ve crossed the cyber threshold,” and that “the models can now just do cyber stuff.”
OpenAI is spending like it believes it
Brockman described what OpenAI does each time a new model arrives. It points the model at its own systems, finds the holes and fixes them.
“We took about 25% of our production engineers and said, all of your projects are on hold, you are just securing now,” he said.
That’s a big commitment from a company racing to ship models. He also expects to do it again with every new model: “we’re going to have a next model, we’re going to have to repeat that process and that that will continue.”
That repeat cycle is what matters for security budgets. Bloomberg’s Joe Weisenthal made the investing case on X: “As long as the offensive cyber capabilities continue to rapidly grow, then companies will keep having to pay for defensive cyber capabilities. Arms race with no end in sight.”
So who gets paid? Brockman: “We’re partnering with companies like CrowdStrike.”
That partnership grew on Sept. 2. CrowdStrike extended Falcon to track OpenAI’s Codex agents as they run, and it brought OpenAI’s GPT-5.6 Cyber model onto its platform.
The estimates are built for today’s budgets
Analysts already expect a lot. Consensus has CrowdStrike’s revenue climbing from $4.81 billion in the year ended January 2026 to $9.02 billion in the year ending January 2029.
That’s about 23% a year. Meanwhile, Gartner expects the whole security market to grow about 11% a year, from $247.5 billion in 2026 to $372.8 billion by 2030. If Brockman is even partly right, I’d expect both numbers to move higher.
Security budgets were already growing before the models could “do cyber stuff.” Palo Alto Networks (PANW) more than doubled its revenue, from $5.50 billion in the year ended July 2022 to $11.5 billion in the year ended July 2026.
OpenAI sells security too
The strongest objection is that OpenAI competes with CrowdStrike as well as partnering with it. In March, OpenAI turned its Aardvark security agent into Codex Security, which it offers to paying ChatGPT customers. Brockman said OpenAI sees security “as a core priority for OpenAI to lead,” since “we have the peak intelligence model, certainly in cybersecurity.”
Box (BOX) CEO Aaron Levie expects cyber to “become one of the biggest token uses in large enterprises.” Tokens are what the labs sell, so some of this spending will go to OpenAI.
Still, OpenAI has already given CrowdStrike a way in. Since Sept. 29, eligible OpenAI enterprise customers can buy the Falcon platform through the OpenAI Marketplace, using part of what they’ve already committed to spend with OpenAI.
To me, that’s a lab saying there’s room for both.
Cue CrowdStrike, at a price
The risk is valuation. Even after Friday’s drop, CrowdStrike trades at 161x forward earnings. That’s well above its three-year average of 102.5x, though below the 197.7x it hit on Oct. 6.
Still, I think CrowdStrike is the stock to own for Brockman’s arms race. OpenAI named it as a partner, lets its own customers buy it, and expects to restart the attack-and-fix cycle with every model it ships. Estimates built on today’s security budgets look too low for that world.
Of course, Brockman put no number or date on “vastly outstrip.” CrowdStrike’s next quarterly report is the first place to look for whether any of it is showing up.
So what is CrowdStrike stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what CrowdStrike could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
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