Google, under its parent company Alphabet, is in advanced talks to acquire the fast-growing cybersecurity firm Wiz for an estimated $23 billion, potentially marking the largest acquisition in Google’s history. This significant move underscores Google’s increasing investment in the cybersecurity sector, emphasizing the crucial importance of cloud security in the digital age.
The negotiations between Google and Wiz started after the startup secured $1 billion from venture capital investors earlier this year. Although the discussions are well-progressed, the final terms have not been agreed upon, and there is still a chance the deal might fall through. The Wall Street Journal first reported the news, but both Google and Wiz have remained silent on the matter.
If the acquisition is finalized, it would eclipse Google’s previous largest deal, the $12.5 billion acquisition of Motorola a decade ago, which was later sold at a considerable loss. The proposed $23 billion price for Wiz is nearly double its recent valuation of $12 billion, reflecting the startup’s rapid expansion and strong market position.
Wiz, founded in March 2020 amid the COVID-19 pandemic, specializes in cloud computing cybersecurity software. Headquartered in New York City, the company claims that 40% of Fortune 100 companies are its clients, including BMW, Slack, and Salesforce. Wiz also collaborates with major cloud service providers like Amazon, Microsoft, and Google.
This potential acquisition follows Alphabet’s purchase of the cybersecurity firm Mandiant for $5.4 billion in March 2022. This earlier acquisition was part of Alphabet’s broader strategy to strengthen its cloud computing business and enhance cybersecurity measures for its clients. Despite the growth in its cloud sales, Google has struggled to match the dominance of Microsoft’s and Amazon’s cloud services.
The acquisition of Wiz is seen as a strategic effort to boost Google’s standing in the cybersecurity market and complement its cloud offerings. The importance of cloud security has been highlighted by recent data breaches, such as the AT&T breach, which exposed nearly all of its wireless customers’ call and text records due to an unauthorized download on a third-party cloud platform.
However, these negotiations are unfolding under the Biden administration’s increased antitrust scrutiny, which has been particularly focused on the practices of major tech companies. This regulatory pressure could impact the deal, though some analysts suggest that political shifts might ease these concerns.
If completed, the deal would represent 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, and their leadership has driven Wiz’s swift rise in the cybersecurity industry.
This potential acquisition highlights the escalating need for robust cybersecurity solutions as digital threats become more sophisticated and pervasive. As more companies migrate their data and operations to cloud platforms, the demand for advanced security measures will continue to grow, making this acquisition a timely and strategic move for Google.
With Wiz’s strong market presence and innovative solutions, Google’s acquisition would enhance its cybersecurity capabilities and send a clear signal to competitors like Microsoft and Amazon about its serious commitment to leading in cloud security. This move is expected to strengthen Google’s ability to offer comprehensive and secure cloud services, further solidifying its position in the competitive cloud computing market.
