Alphabet, the parent company of Google, is in advanced talks to acquire the rapidly growing cybersecurity startup Wiz for approximately $23 billion, according to a source familiar with the matter who confirmed the information to CNN.
Acquiring Wiz, which develops cybersecurity software for cloud computing, would be a significant investment for Google in the cybersecurity sector, representing the tech giant’s largest acquisition to date.
Discussions between Google and Wiz commenced after the startup raised $1 billion from venture capital investors earlier this year, the source indicated.
The terms of the potential deal have not been finalized, and the negotiations could still fall through, the source added.
The Wall Street Journal was the first to report on the Google-Wiz negotiations.
This deal would surpass Google’s previous record acquisition of Motorola for $12.5 billion about a decade ago. Google sold Motorola just two years later at a substantial loss.
Wiz’s $23 billion price tag is nearly double its most recent valuation of $12 billion from its latest funding round.
In March 2022, Alphabet acquired the cybersecurity firm Mandiant for $5.4 billion, aiming to help companies better address cyber threats and strengthen its cloud computing business.
Google Cloud is a key part of the company’s strategy to diversify revenue beyond its core search advertising business. Despite growing cloud sales, Google has struggled to compete with similar services from Microsoft and Amazon.
Acquiring Wiz would signal a strong move against Microsoft and Amazon, demonstrating that Google is making a major investment in cybersecurity to enhance its cloud services, Dan Ives, managing director and senior equity research analyst at Wedbush, noted in a client memo on Monday.
Cloud security has become increasingly critical as companies invest heavily in moving data to cloud platforms. Recently, AT&T disclosed that nearly all its wireless customers’ call and text records were exposed in a significant breach caused by an “illegal download” on a third-party cloud platform.
The Google-Wiz deal talks continue despite intense antitrust scrutiny of tech giants under the Biden administration.
However, this scrutiny could lessen if Trump regains the presidency, potentially weakening the Federal Trade Commission and leading to an “accelerated merger and acquisition environment for Big Tech,” Ives suggested.
If the acquisition is finalized and completed, it would mark a significant exit for Wiz and its founders — Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik. The four executives met years ago while serving in Unit 8200, the cyber intelligence division of the Israel Defense Forces.
Founded in March 2020 during the COVID-19 pandemic, New York City-based Wiz has seen remarkable growth. Today, the company claims that 40% of Fortune 100 companies are its clients.
Notable customers include BMW, Slack, and Salesforce, and it collaborates with major cloud providers like Amazon, Microsoft, and Google.
