Zscaler, Inc. is an American cybersecurity company specializing in cloud-native zero trust security solutions, founded in 2007 by entrepreneur Jay Chaudhry and headquartered in San Jose, California.[1][2][3] The company pioneered the Zero Trust Exchange platform, which delivers secure access to applications and data for users, devices, and workloads regardless of location, replacing traditional VPNs and legacy security architectures with a cloud-based approach that inspects all traffic in real time.[1][4]Zscaler's core offerings include Zscaler Internet Access (ZIA) for secure web gateway and threatprotection, Zscaler Private Access (ZPA) for zerotrustnetworkaccess to private applications, and additional services such as data loss prevention, cloud workload protection, and digital experience monitoring.[5][6] These solutions are delivered via the world's largest inline cloudsecurityplatform, processing over 500 billion daily transactions to protect more than 40% of the Fortune 500.[1] As of fiscal year 2025, Zscaler reported annual recurring revenue of $3.015 billion, up 22% year-over-year, with approximately 7,900 employees and over 4,000 enterprise customers worldwide.[7][8][9]The company went public on the NASDAQstock exchange (ticker: ZS) in March 2018, raising $192 million in its initial public offering, and has since grown into a leader in the secure access service edge (SASE) market, driven by increasing demand for zero trust architectures amid rising cyber threats and cloud adoption.[10][4] Zscaler's mission is to empower organizations to harness the full potential of cloud and mobility by securely connecting users to applications from any device or location, with global offices spanning North America, Europe, Asia-Pacific, and beyond.[11]
Company Overview
Founding and Early Vision
Zscaler was founded in 2007 by Jay Chaudhry in San Jose, California, at a pivotal moment when enterprises were increasingly adopting cloud applications and embracing more mobile workforces.[11][12] Chaudhry, an experienced entrepreneur in the cybersecurity space, recognized the limitations of traditional on-premises security solutions in securing distributed users and SaaS environments, motivating him to pioneer a scalable, cloud-delivered alternative.[13] This vision addressed the growing need for secure access to cloud resources amid rising remote work trends and the proliferation of software-as-a-service (SaaS) tools, which exposed organizations to new risks from unsecured networks and unmanaged devices.[13]Chaudhry's background shaped this innovative approach, drawing from his successful ventures in security technologies. He previously founded SecureIT in 1996, the first pure-play internet security service provider, which was acquired by VeriSign in 1998.[2] From 2000 to 2006, he led CipherTrust, introducing the industry's first email security gateway, which merged with Secure Computing.[2] Concurrently, Chaudhry established AirDefense in 2002, a pioneer in wireless security solutions, later acquired by Motorola in 2008.[14] These experiences highlighted the inefficiencies of appliance-based systems, inspiring Chaudhry to develop a proxy-free, cloud-native architecture that eliminated hardware dependencies and enabled seamless, scalable protection.[2][15]The company's initial focus centered on a multitenant cloudsecurityplatform designed to supplant legacy VPNs and firewalls, which were ill-suited for the dynamic demands of cloud and mobile access.[13] By delivering security as a service directly in the cloud, Zscaler aimed to provide low-latency inspection and policyenforcement without the bottlenecks of traditional perimeter defenses, laying the groundwork for what would evolve into a zero trust model.[16] This architecture emphasized efficiency and adaptability, allowing organizations to protect users regardless of location or device while supporting the secure adoption of emerging technologies.[13]
Headquarters and Global Operations
Zscaler's global headquarters is located at 120 Holger Way in San Jose, California, serving as the central hub for its operations and leadership.[17] The company maintains additional offices across the United States, including locations in Alpharetta (near Atlanta), Chicago, Denver, and New York, to support its domestic sales, engineering, and customer support teams.[18] Internationally, Zscaler operates key hubs in Dublin for Europe, Middle East, and Africa (EMEA) activities, Tokyo for Asia-Pacific (APAC) expansion, and Sydney for Australia and New Zealand operations, enabling localized service delivery and compliance.[17][19][17]As of the end of fiscal year 2025 (July 31, 2025), Zscaler employs 7,923 people worldwide, with a significant emphasis on engineering and sales roles distributed across more than 10 countries.[20] Approximately 63% of its workforce is based outside the United States, reflecting the company's commitment to global talent acquisition and innovation in cloud security.[21] This distributed structure supports Zscaler's cloud-native model, allowing teams to collaborate seamlessly across time zones.Zscaler's revenue for fiscal 2025 totaled $2.673 billion.[7] The company serves over 9,400 customers globally, including over 45% of the Fortune 500, with customers operating in over 185 countries, underscoring its scale and penetration in enterprise security markets.[22][23] This international footprint has been bolstered by strategic acquisitions, enhancing its operational reach.[23]
History
2007–2017: Inception and Initial Growth
Zscaler was founded in 2007 by Jay Chaudhry and K. Kailash with a vision to deliver security as a cloud service, shifting from traditional hardware-based approaches. In 2008, the company launched its first cloud-delivered web security service, pioneering a multi-tenant architecture that enabled secure internet access for enterprises without the need for on-premises hardware appliances.[24][25]By the early 2010s, Zscaler achieved a key milestone by securing Takeda Pharmaceuticals, a Global 2000 company, as a client, which validated the platform's readiness for large-scale enterprise deployments. This early adoption demonstrated the service's ability to handle complex, global security needs effectively.Throughout the period, Zscaler raised funding from prominent investors including Accel Partners and Insight Venture Partners, supporting platform development and market expansion, including an initial Series A round of approximately $12 million in 2008 and a $38 million round in 2012. A significant $110 million Series D round in 2015, led by TPG with participation from others, valued the company at over $1 billion, achieving unicorn status.[26][27]
2018–Present: IPO, Expansion, and Recent Milestones
In March 2018, Zscaler went public with its initial public offering (IPO) on the NASDAQ exchange under the ticker symbol ZS, pricing 12 million shares at $16 each and raising $192 million in gross proceeds.[10] The shares began trading on March 16, 2018, and quickly surged, closing the first day at $33 per share, which propelled the company's initial market capitalization above $2 billion.[28]Following the IPO, Zscaler experienced robust revenue expansion, growing from $190.2 million in fiscal year 2018 (ended July 31, 2018) to $2.673 billion in fiscal year 2025 (ended July 31, 2025), with year-over-year increases consistently exceeding 30% through much of the period, fueled by its subscription-based SaaS model that accounted for over 97% of total revenue.[29][7] This growth reflected strong demand for the company's cloud-native security solutions amid rising cybersecurity needs.In 2022, Zscaler marked its 15-year anniversary since founding in 2007, highlighting a decade-and-a-half of innovation in zero trust architecture and cloud security.[30] By fiscal 2025, the company raised its full-year revenue guidance to $2.659 billion to $2.661 billion in its third-quarter earnings release, coinciding with the announcement of its acquisition of Red Canary to bolster AI-powered security operations.[31]
Products and Technology
Zero Trust Exchange Platform
The Zscaler Zero Trust Exchange is a cloud-native security platform designed as a secure fabric that connects users, devices, applications, and data without relying on traditional network perimeters. It implements zero trust principles by enforcing least-privileged access based on identity, context, and policy, enabling identity-based segmentation that verifies every transaction regardless of location or network. This architecture shifts security from perimeter defenses to a continuous verification model, ensuring that access is granted only to authenticated entities with appropriate permissions, thereby reducing the attack surface in distributed cloud environments.[32]Key components of the Zero Trust Exchange include inline inspection capabilities through its proxy-based architecture, which decrypts and analyzes 100% of traffic, including encrypted TLS/SSL sessions, at scale to detect anomalies in real time. It integrates AI and machine learning for advanced threat detection, automating the identification of sophisticated cyberattacks, malware, and data exfiltration attempts while minimizing false positives through behavioral analysis and global intelligence sharing. The platform's global proxy network, comprising over 150 data centers worldwide, ensures low-latency enforcement by routing traffic to the nearest point of presence, providing consistent security without performancedegradation.[33][34][35]Unlike legacy security models that depend on VPNs for remote access, the Zero Trust Exchange differentiates by eliminating the need for such tools, offering direct, secure user-to-application connections that bypass backhauling traffic to central data centers. This approach enhances scalability and user experience while preventing lateral movement of threats within networks. As of 2025, the platform processes over 500 billion transactions daily, demonstrating its capacity to handle enterprise-scale operations securely.[36]
Core Security Offerings
Zscaler's core security offerings are built on its Zero Trust Exchange platform, providing secure access and threat protection for internet, private applications, and data.[37]Zscaler Internet Access (ZIA) serves as a secure web gateway designed to protect internet-bound traffic from threats. It inspects all traffic inline, enabling organizations to enforce security policies without traditional hardware appliances. Key features include URL filtering, which blocks access to malicious or inappropriate websites based on predefined categories and custom lists to prevent phishing and malware distribution.[38][39] ZIA also performs SSL/TLS inspection to decrypt and analyze encrypted traffic, uncovering hidden threats in over 90% of web sessions that are now encrypted, while ensuring compliance with data protection regulations.[40][41] Additionally, its advanced sandboxing capability isolates and detonates suspicious files in a virtual environment to detect zero-day malware before it reaches users, integrating seamlessly with broader threat intelligence feeds.[42][43]Zscaler Private Access (ZPA) delivers zero trust network access specifically for private applications, eliminating the need for VPNs by granting users direct, secure connections based on identity and context rather than network location. This approach uses app segmentation to isolate applications, ensuring that authenticated users can only access specific resources they are permitted to use, thereby preventing lateral movement by attackers within the network.[44][45] ZPA enforces granular policies at the application level, supporting hybrid environments with private apps hosted on-premises or in the cloud, and reduces the attack surface by never exposing the full network to remote users.[46][47]Zscaler Data Protection encompasses data loss prevention (DLP) and cloud access security broker (CASB) functionalities to safeguard sensitive information across diverse environments, including SaaS, IaaS, and on-premises systems. The DLP component monitors data in motion, at rest, and in use, applying predefined dictionaries and policies to detect and block exfiltration of intellectual property, financial data, or personal information through channels like email, web uploads, and cloud storage.[48][49] Integrated CASB capabilities provide visibility into shadow IT usage, enforce inline controls for sanctioned SaaS applications, and prevent unauthorized data sharing by scanning API interactions and user behaviors in real time.[50][51] This unified protection ensures encryption and compliance with standards like GDPR and HIPAA, with centralized reporting for auditing data flows.[52]Zscaler Cloud Workload Protection (CWP) provides runtime security for cloud-native workloads, including containers, Kubernetes, and serverless functions, by enforcing zero trust policies to detect and respond to threats in IaaS and PaaS environments. It offers vulnerability management, compliancemonitoring, and behavioral analysis to protect against runtime exploits and misconfigurations without requiring agents in some cases.[53]Zscaler Digital Experience (ZDX) monitors and optimizes end-user digital experiences across networks, applications, and devices, providing visibility into performance issues, latency, and jitter to ensure secure and efficient access in hybrid work environments.[54]
AI-Driven Innovations and SASE Integration
Zscaler has integrated agentic AI into its security ecosystem to enable automated threat response, leveraging the Data Fabric for Security to aggregate and unify data from various tools and systems for real-time analysis and action. This agentic AI capability, enhanced through the August 2025 acquisition of Red Canary, allows for proactive threat prioritization and context-aware remediation, such as monitoring generative AI application prompts to prevent policy violations and data exfiltration.[55][56][57]The November 2025 acquisition of SPLX further bolsters these AI features by introducing shift-left AI asset discovery, which identifies and classifies AI models and data early in the development lifecycle, alongside automated red teaming to simulate attacks and uncover vulnerabilities in AI systems. These capabilities integrate with Zscaler's Zero Trust Exchange platform, providing governance and automated responses to mitigate risks from AI deployment, including classification of sensitive assets to enforce compliance.[58][59]In parallel, Zscaler's Secure Access Service Edge (SASE) platform converges its core offerings—Zscaler Internet Access (ZIA) for secure web and cloud access, Zscaler Private Access (ZPA) for zero trust network access—with Zero Trust SD-WAN to deliver unified networking and security services. This architecture supports least-privileged access for users, devices, and workloads, reducing latency and enhancing protection against lateral movement in hybrid environments.[60][61]Gartner recognized Zscaler as a Visionary in the 2025 Magic Quadrant for SASE Platforms, citing its innovative zero trust approach and completeness of vision in integrating AI-driven threat protection with SASE components like cloud access security broker (CASB), data loss prevention (DLP), and firewall-as-a-service.[62][61]Among 2025 updates, the SPLX integration enables AI asset discovery to map and secure enterprise AI inventories proactively, while inline GenAI DLP features protect against data leaks in AI workflows, having detected over 53.7 million sensitive transactions to platforms like AzureAI Foundry in recent months. Additionally, Zscaler's ransomware detection capabilities blocked a 145.9% year-over-year increase in attacks from April 2024 to April 2025, as detailed in the ThreatLabz 2025 Ransomware Report, underscoring the platform's efficacy in countering escalating extortion tactics.[58][63][64]
Acquisitions
Pre-2020 Acquisitions
Zscaler's acquisition strategy in its early years emphasized targeted investments in emerging technologies to fortify its cloud-native zero trust platform, with deals centered on enhancing threat detection and endpoint protection.In August 2018, Zscaler acquired the artificial intelligence and machine learning team along with the core technology from TrustPath, a stealth-mode cybersecurity startup based in the United States. This acquisition integrated advanced AI capabilities into Zscaler's platform, enabling more sophisticated analysis of the over 50 billion daily transactions processed at peak volumes to derive actionable security intelligence. Specifically, it bolstered user behavioral profiling, enterprise risk assessment, and detection of advanced persistent threats, marking an early step in embedding machine learning for proactive defense mechanisms.[65]In May 2019, Zscaler completed the acquisition of Appsulate, a U.K.-based developer of browser isolation technology founded in 2016. Appsulate's cloud-rendering solution, which streams only safe pixels to user devices, was integrated to address web-borne malware and data exfiltration risks in SaaS environments, complementing Zscaler's web gateway services. This move expanded the platform's isolation features, providing granular control over remote browser sessions and reducing the attack surface for endpoint users without compromising performance.[66][67]These two pre-2020 deals, both located in the U.S. and Europe with undisclosed values estimated under $50 million combined, exemplified Zscaler's focus on U.S.-centric innovation to build foundational zero trust elements like AI-driven analytics and isolation tech. They contributed to the company's initial growth by accelerating platform maturity ahead of its post-IPO expansion phase.
2020–2025 Acquisitions
During the period from 2020 to 2025, Zscaler pursued an aggressive acquisition strategy to bolster its Zero Trust Exchange platform, completing at least nine acquisitions across the United States, Israel, and India, with a cumulative investment exceeding $1 billion in disclosed deals alone. These moves reflected a strategic pivot toward enhancing cloud-native security, AI-driven threat detection, and operational resilience, particularly as the company scaled post-IPO amid rising demand for integrated security operations and supply chain protections. Key targets included startups specializing in cloud posture management, microsegmentation, deception technologies, workflow automation, SaaSsecurity, data fabrics, and advanced AI capabilities for managed detection and response (MDR).[68][69]In 2020, Zscaler targeted foundational cloud security enhancements with two acquisitions. The company first announced its intent to acquire Cloudneeti, a U.S.-based cloud security posture management (CSPM) firm, in April, integrating its compliance and risk assessment tools to strengthen multi-cloud visibility and governance within Zscaler's platform. Later that May, Zscaler acquired Edgewise Networks, a U.S.-based pioneer in zero-trust microsegmentation for application communications in public clouds, to address lateral movement risks in hybrid environments without relying on traditional firewalls. These early deals laid the groundwork for Zscaler's expansion into comprehensive cloud workload protection.[70][71]The 2021 acquisitions focused on entitlement management and active defense mechanisms. In April, Zscaler acquired Trustdome, a cloudinfrastructureentitlement management (CIEM) provider, to close visibility gaps in identity and access for cloud workloads, enabling automated policyenforcement and risk reduction. Just a month later, in May, the company acquired Smokescreen Technologies, an India-headquartered deception technology specialist, to incorporate active defense capabilities like dynamic decoys and lures into its Zero Trust Exchange, helping organizations detect and disrupt advanced persistent threats more proactively.[72][73]By 2022, Zscaler's strategy emphasized security operations automation with the September acquisition of ShiftRight, a U.S.-based leader in AI-powered securityorchestration, automation, and response (SOAR). This integration allowed Zscaler to streamline incident response workflows, correlating threats across its platform for faster remediation and reduced operational overhead in large-scale environments. In 2023, the focus shifted to SaaS ecosystem risks, as Zscaler acquired Canonic Security, an Israel-based startup, in February; Canonic's runtime protection for SaaS applications enhanced supply chainsecurity by monitoring shadow IT and third-party integrations for anomalous behaviors.[74][75]The 2024 acquisitions accelerated Zscaler's AI and data-centric capabilities. In March, Zscaler acquired Avalor, an Israel-based securitydata fabric provider, for approximately $350 million, enabling real-timeAI-powered analytics across disparate securitydata sources to improve threathunting and incident prioritization. This was followed in April by the acquisition of Airgap Networks, a U.S. firm specializing in agentless network segmentation, which simplified zero-trust implementations for legacy and IoT assets without performance impacts. These deals positioned Zscaler to handle the growing complexity of enterprise data lakes in AI-era security.[76]In 2025, Zscaler's acquisitions underscored a deepening commitment to agentic AI and AI governance amid rapid adoption of generative technologies. The company signed a definitive agreement in May to acquire Red Canary, a Denver-based MDR provider, for $675 million, completing the deal in August; Red Canary's AI-driven threat detection and response platform integrated with Zscaler's data fabric to deliver autonomous security operations, reducing mean time to respond (MTTR) for endpoint and cloud threats. Later, in November, Zscaler acquired SPLX, a Croatia-founded AIsecurity startup (with operations aligned to U.S. and European markets), for an undisclosed sum, adding automated red teaming simulations, AI asset discovery, and runtime guardrails to secure the full AI lifecycle from development to deployment. These final deals marked Zscaler's evolution into a leader in AI-secured zero-trust architectures, investing heavily in operational resilience and proactive defenses.[77][78][58]
Leadership
Executive Team
Jay Chaudhry serves as the founder, chairman, and chief executive officer of Zscaler, a position he has held since founding the company in 2007.[2] With over 25 years of experience in the cybersecurity industry, Chaudhry oversees the company's overall strategy and vision, particularly in advancing cloud-native security solutions.[2] Prior to Zscaler, he founded and led several successful cybersecurity ventures, including AirDefense (acquired by Motorola), CipherTrust (merged with Secure Computing), CoreHarbor (acquired by USi/AT&T), and SecureIT (acquired by VeriSign in 1998), establishing a track record of multiple high-profile exits in the sector.[2]Kevin Rubin has been the chief financial officer of Zscaler since May 2025, where he manages the company's global financial operations, planning, analysis, and investor relations.[79][80] In this role, Rubin has played a key part in providing revenue guidance for fiscal year 2025, including raising the outlook to between $2.659 billion and $2.661 billion in revenue upon his appointment.[81] He has also supported the financial strategy behind Zscaler's 2025 acquisitions, such as the $675 million purchase of Red Canary in August and the acquisition of SPLX in November, aimed at enhancing AI-driven threat detection and security governance.[55][58] Before joining Zscaler, Rubin served as CFO at BetterUp and Alteryx, where he led financial scaling, an IPO, and multiple acquisitions.[79]Adam Geller is Zscaler's chief product officer, responsible for directing the company's product vision, innovation, design, and development, with a focus on Zero Trust architecture and AI integrations.[82] Under his leadership, Zscaler has advanced its platform to incorporate AI-powered features for enhanced threat detection and secure access service edge (SASE) capabilities.[82] Geller brings extensive experience from prior roles as CEO of Exabeam, where he developed SIEM solutions, and at Palo Alto Networks, leading product lines in virtualization and cloud security.[82]Mike Rich holds the position of chief revenue officer and president of global sales at Zscaler, driving the company's worldwide sales strategy and revenue growth.[83] With more than 30 years in technology sales, Rich emphasizes building diverse teams and fostering customer-centric approaches to expand Zscaler's market presence across industries.[83] Previously, as president of Americas at ServiceNow from 2011 to 2023, he scaled regional revenue from $500 million to over $6 billion while contributing to the company's overall growth from $80 million to $8 billion in annual revenue.[83]
Board of Directors
Zscaler's board of directors comprises nine members as of November 2025, providing strategic oversight to the cloudsecurity company following its 2018 initial public offering on NASDAQ.[84][85]The board is led by Chairman Jay Chaudhry, Zscaler's co-founder and chief executive officer, who has guided the company since its inception in 2007.[86] Independent directors bring diverse expertise in technology, finance, and operations, including Charles Giancarlo, chief executive officer of Pure Storage and former executive vice president of global corporate strategy at Cisco Systems; Karen Blasing, a four-time public companychief financial officer with prior roles at Ansys and Webroot; Eileen Naughton, former vice president of product management at Google; Scott Darling, managing director at Dell Technologies Capital; David Schneider, general partner at Coatue Management; Andrew Brown, chief executive officer of Sand Hill East; and James Beer, former chief financial officer of Boeing. In addition, Raj Judge, executive vice president of corporate strategy and ventures at Zscaler, joined the board in May 2025.[87][88][89][90][91]The board operates through three standing committees: the Audit Committee, chaired by Karen Blasing and including Andrew Brown and Scott Darling; the Compensation Committee, chaired by Charles Giancarlo and including Andrew Brown; and the Nominating and Corporate Governance Committee, chaired by Scott Darling and including Eileen Naughton. These committees emphasize cybersecurity acumen, with several members holding deep experience in technology security and risk management, alongside efforts to promote board diversity, including two female directors representing key perspectives in tech and media.[92][84]Governance practices include annual shareholder meetings to address key matters such as director elections and executive compensation, regular environmental, social, and governance (ESG) reporting through the company's annual Corporate Responsibility Report, and adherence to NASDAQ's corporate governance standards, including majority independent directors and annual committee charters.[93][94][95]
Controversies and Legal Issues
Data Breaches and Security Incidents
In September 2025, Zscaler experienced a supply chain security incident stemming from the compromise of OAuth tokens associated with the Salesloft and Drift third-party applications integrated with its Salesforce environment. Attackers exploited these stolen tokens to gain unauthorized access to limited Salesforce data, including business contact information such as names, email addresses, job titles, phone numbers, and regional details for a large number of Zscaler customers, as well as product licensing information and plain-text support case metadata like case numbers, descriptions, and statuses. No attachments, files, or sensitive customer data within Zscaler's core platform were accessed, and there was no evidence of further misuse or impact on Zscaler's products, services, or infrastructure.[96][97][98]The incident was part of a broader campaign affecting over 700 organizations using the Salesloft Drift integration with Salesforce, highlighting vulnerabilities in SaaSsupply chain dependencies. Zscaler's Salesforce instance was targeted between August and September 2025, with the company detecting suspicious activity and confirming the scope by early September. While no core platform breach occurred, the exposure of customer metadata underscored risks in third-party OAuth integrations.[99][100][101]In October 2025, Zscaler responded to a disclosed security breach at F5 Networks by issuing guidance on related vulnerabilities, following F5's public announcement of a nation-state actor's compromise that included the theft of BIG-IP source code and details on zero-day exploits. Zscaler's advisory emphasized the potential for exploits targeting F5 products, recommending immediate patching of over 40 identified vulnerabilities, such as CVE-2025-53868 and CVE-2025-60016, both with CVSS scores of 8.7. Through its Zscaler Internet Access (ZIA) platform, Zscaler enabled automatic blocking of known and emerging exploits by inspecting inline traffic, preventing unauthorized access without requiring additional customerconfiguration.[102][103][104]Across both incidents, Zscaler implemented enhanced response measures, including the mandatory enforcement of multi-factor authentication (MFA) for all third-party integrations, rotation of API tokens, and deployment of AI-enhanced monitoring to detect anomalous activities in real-time. The company conducted joint investigations with affected vendors like Salesloft and collaborated with cybersecurity firms to review third-party risks, with no reported financial impact from these events. These actions reinforced Zscaler's zero trust architecture while drawing attention to persistent SaaS supply chain vulnerabilities in the cybersecurity sector.[96][105][106]
Lawsuits and Regulatory Challenges
In 2023, Zscaler faced a class-action lawsuit under California's Private Attorneys General Act (PAGA) in Wenzel v. Zscaler, Inc., filed in Santa Clara County Superior Court. The suit, initiated by plaintiff Sandra Wenzel on behalf of affected employees, alleged that Zscaler systematically failed to reimburse employees for necessary business expenses, such as cell phone and internet costs incurred for work purposes, in violation of California Labor Code sections 2802 and related provisions. This failure effectively reduced employees' wages below legal minimums, particularly for those classified as exempt from overtime. The case highlighted broader labor misclassification concerns, as the plaintiffs argued that certain roles did not qualify for exempt status under state law. The case was settled in early 2025, with final approval on March 17, 2025, without admission of liability.[107]In 2024, Zscaler was sued for patent infringement by DataCloud Technologies LLC in the U.S. District Court for the Eastern District of Texas (Case No. 2:24-cv-00504). The complaint, filed on July 9, accused Zscaler's cloud security products, including its Android Client Connector app and related online security features, of infringing four patents owned by DataCloud: U.S. Patent Nos. 6,651,063; 7,209,959; 7,398,298; and 8,370,457. These patents cover technologies for data storage, user destination addressing, and efficient cloud-based data management, which DataCloud claimed Zscaler utilized without authorization in its Zero Trust platform. Zscaler responded by denying the infringement allegations in its answer and asserting that the patents are invalid due to prior art and obviousness, while also filing counterclaims challenging their enforceability. The case was settled and dismissed on December 11, 2024.[108][109]By mid-2025, Zscaler encountered significant regulatory scrutiny over its AI data practices, particularly following announcements at its Zenith Live conference in June, where CEO Jay Chaudhry highlighted the company's use of vast transaction logs to train AI models for threat detection. Reports emerged alleging that Zscaler processed up to half a trillion daily customer logs—potentially including proprietary business data—for AI enhancement, raising concerns about privacy violations under regulations like GDPR and potential unauthorized data sharing. Although no formal charges were filed by the FTC or other agencies, the backlash prompted widespread debate on data ownership and transparency in AI-driven cybersecurity, leading Zscaler to issue a public clarification in August affirming that customerproprietary or personal data is never used for external AI training and emphasizing data isolation within tenant boundaries. This response included updates to its privacy policy to enhance disclosure on AI data handling, aiming to rebuild trust amid the controversy.[110][111]