Bloomberg Businessweek Podcast Summary

Episode: Zscaler CEO Jay Chaudhry on Battling Global Cyber Threats

Date: December 2, 2025
Hosts: Carol Massar, Tim Stenovec (occasionally referred to as Tim Stankevicius)
Guests: Jay Chaudhry (Founder, Chairman & CEO, Zscaler), Mandeep Singh (Global Head of Tech Research, Bloomberg Intelligence)

Episode Overview

This episode dives deep into the evolving landscape of global cybersecurity, with a focus on Zscaler, a leading cloud security firm. Jay Chaudhry, Zscaler’s CEO, joins the hosts to address recent market moves, growth forecasts, and the increasing role of Artificial Intelligence (AI) in both cyber threats and defensive strategies. The discussion also covers Zscaler’s business model evolution, their approach to zero trust security, and how the company is leveraging vast data to power next-generation security.

Key Discussion Points & Insights

1. Zscaler’s Performance & Market Concerns

• Stock Volatility: Despite being up nearly 40% YTD, Zscaler’s shares were recently downgraded by Bernstein due to growth concerns, causing market jitters. (01:53–02:43)
• Jay’s Response:
  • "Not at all. We had an outstanding quarter.… We beat all the metrics that Wall street was looking for." (Jay Chaudhry, 03:11)
  • Stresses strong ARR and revenue growth (both 26%), free cash flow margin at 52%, and operating margin at 22%.
  • Combines cash flow and revenue growth for a “rule of 40” score of 78%, placing Zscaler amongst a select few software firms at $3B+ scale.
  • Notes, "Investors get it wrong from time to time. This is one of those." (Jay Chaudhry, 04:04)

2. Zscaler’s Innovation & Approach to Security

• Zero Trust Philosophy:
  • Innovating with zero trust architecture—moving beyond traditional firewalls and VPNs.
  • “Those innovations started with zero trust architecture which has changed the world of old school firewalls and VPNs.” (Jay Chaudhry, 04:26)
  • Over 45% of Fortune 500 companies rely on Zscaler.
• AI Security's Emergence:
  • AI security is "becoming a big concern" and Zscaler’s zero trust foundation positions them well against emerging threats.

3. Business Model Evolution for the AI Era

• From Seat-Based to Hybrid Models:
  • Initially, Zscaler’s security offering was billed per user.
  • Expanded to cloud workloads (workload- and traffic-based billing).
  • With AI agents proliferating, there will be even more digital “users” (agents) to secure.
  • “I believe every company will have scores of agents for every single employee and they need to be secure and we are extremely well positioned to handle that.” (Jay Chaudhry, 06:39)

4. Competition & Market Focus

• On Competitors & Integration:
  • Zscaler prefers an integrated platform over acquiring a multitude of "point solutions."
  • “We not only provide secure and reliable experience, we make sure that it is fast and you can troubleshoot those things.” (Jay Chaudhry, 07:40)
• On Observability & Identity:
  • Observability is provided “where it matters to our customers,” not as a broad area.
  • For identity, Zscaler federates with leading providers (Microsoft, Okta, AWS, Google) rather than aiming for ownership:
    • “Our philosophy is to federate those identity providers...I do not need to own everything. I need to do some of the things I do the best and integrate with partners with proper API integration.” (Jay Chaudhry, 08:44)

5. The Role of Large Language Models (LLMs) in Security

• Custom Security LLMs:
  • “Yes. The answer is yes. We are actually working on building our security focused LLM and I do not need to have the large, large language model. Security is very focused set of high quality data.” (Jay Chaudhry, 10:07)
  • Zscaler processes over half a trillion transaction logs daily, leveraging anonymized customer data to surface and respond to threats in near real time.
  • The Red Canary acquisition adds advanced agentic AI tech to their platform.

6. AI–Empowered Threats & Defensive Innovations

• AI Makes Attackers Faster & Smarter:
  • Attackers harness AI for rapid vulnerability scanning, crafting personalized phishing emails, and automating attacks inside networks.
  • “You can go to ChatGPT and say, Tell me all the firewalls and VPNs that have vulnerabilities and give it to me in a nice tabular format…under 60 seconds.” (Jay Chaudhry, 12:09)
  • AI improves the social engineering aspect—tailoring phishing to mimic legitimate figures.
• Zscaler’s Defensive Edge:
  • "We hide your attack surface. Your applications are hidden behind our cloud. Bad guys can't even find you. They can't find you, they can’t attack you.” (Jay Chaudhry, 12:51)
  • Contrasts this to the “castle” model of perimeter-based firewalls.

Notable Quotes & Memorable Moments

• On Growth Perception:

  • “I think investors get it wrong from time to time. This is one of those.”
    — Jay Chaudhry, CEO (04:04)

• On AI’s Impact in Security:

  • “Those innovations started with zero trust architecture which has changed the world of old school firewalls and VPNs. And now as AI security is coming, AI security is becoming a big concern. And zero trust that we pioneered is the foundation of it.”
    — Jay Chaudhry (04:26)

• On LLMs and Data:

  • “Security is very focused set of high quality data...AI is only as good as the data that powers it and we have the best data and we believe we can help identify some of these threats and in almost near real time.”
    — Jay Chaudhry (10:12)

• On Attackers Using AI:

  • “Now you can go to ChatGPT and say, Tell me all the firewalls and VPNs that have vulnerabilities and give it to me in a nice tabular format under 60 seconds. You can get that.”
    — Jay Chaudhry (12:09)

Segment Timestamps

• [01:53] Market discussion, Zscaler’s stock moves, and analyst reactions
• [03:11] Jay Chaudhry on Zscaler’s financial strength and growth metrics
• [04:26] Innovation focus: zero trust & AI security
• [05:26] Business model adaptation for AI workloads
• [06:39] The rise of AI agents and implications for security
• [07:07] Discussion on observability and integration philosophy
• [08:28] Role of identity providers and partnership strategy
• [10:07] Building a custom security-focused LLM
• [11:56] Real-world examples of attackers using AI and Zscaler’s response
• [12:51] Zscaler’s "attack surface hiding" advantage

Tone and Language

The conversation strikes an optimistic, confident tone regarding Zscaler’s strategy, financial position, and technological leadership, particularly in the context of rapid industry changes and new AI-driven security challenges. Jay Chaudhry is direct yet measured, emphasizing innovation, focus, and strategic partnerships over tech “land grabs.”

Summary for New Listeners

This episode delivers a robust overview of Zscaler’s pivotal role and strategy in an era where AI is transforming both cyber threats and defenses. The CEO’s insights paint a picture of a company confident in its unique platform approach, adaptability to new security paradigms, and commitment to leveraging data and AI as both shield and sword. Key industry concepts—zero trust, identity management, LLMs, and observability—are discussed with clarity, making the conversation valuable to tech and business leaders focused on modern cybersecurity.

End of Summary