In what could become the largest acquisition in its history, Google, through its parent company Alphabet, is in advanced negotiations to purchase the rapidly growing cybersecurity startup Wiz for approximately $23 billion. This move signifies a substantial investment by Google into the cybersecurity sector, reflecting the increasing importance of cloud security in today’s digital landscape.
The discussions between Google and Wiz commenced following the startup’s successful raise of $1 billion from venture capital investors earlier this year. Despite the advanced stage of these talks, the terms of the potential deal have yet to be finalized, and there remains the possibility that negotiations could still collapse. The Wall Street Journal initially reported the news, though neither Google nor Wiz responded to requests for comment.
Should the acquisition proceed, it would surpass Google’s previous largest purchase, the $12.5 billion acquisition of Motorola a decade ago. Notably, Google later sold Motorola at a significant loss. The proposed $23 billion price tag for Wiz is nearly double the startup’s most recent valuation of $12 billion, reflecting its rapid growth and strong market position.
Wiz, which specializes in cybersecurity software for cloud computing, has seen explosive growth since its founding in March 2020 during the COVID-19 pandemic. Based in New York City, the company now claims that 40% of Fortune 100 companies are among its clients, including prominent names such as BMW, Slack, and Salesforce. It also collaborates with major cloud service providers like Amazon, Microsoft, and Google.
This acquisition would also follow Alphabet’s earlier purchase of the cybersecurity firm Mandiant for $5.4 billion in March 2022. This previous acquisition was part of Alphabet’s broader strategy to enhance its cloud computing business and help companies better address cyber threats. Google Cloud has been central to the company’s efforts to diversify its revenue beyond its core search advertising business. Despite the growth in its cloud sales, Google has struggled to compete with the more established services of Microsoft and Amazon.
The potential acquisition of Wiz is seen as a significant strategic move to strengthen Google’s position in the cybersecurity space and to complement its flagship cloud offerings. The importance of cloud security has been underscored by recent high-profile data breaches, such as the one experienced by AT&T, which exposed nearly all of its wireless customers’ call and text records due to an “illegal download” on a third-party cloud platform.
While these acquisition talks are progressing, they are occurring under the shadow of intense antitrust scrutiny from the Biden administration, which has been particularly focused on the practices of major tech companies. This scrutiny could potentially affect the deal, although some analysts suggest that regulatory pressures might ease if there is a shift in political power.
If the deal is finalized and closed, it would mark a significant exit for Wiz’s founders—Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik. The four met during their service in Unit 8200, the cyber intelligence division of the Israel Defense Forces. Their leadership has been instrumental in driving Wiz’s rapid ascent in the cybersecurity industry.
Overall, this potential acquisition reflects the increasing value and necessity of robust cybersecurity solutions in a world where digital threats are becoming more sophisticated and pervasive. As companies continue to migrate their data and operations to cloud platforms, the demand for advanced security measures will only grow, making this acquisition a timely and strategic move for Google.
With Wiz’s strong market presence and innovative solutions, Google’s acquisition would not only bolster its own cybersecurity capabilities but also send a clear signal to its competitors, Microsoft and Amazon, of its serious commitment to leading in the cloud security domain. This move is expected to enhance Google’s ability to offer comprehensive and secure cloud services to its clients, further solidifying its position in the competitive cloud computing market.
