Google Nears Historic Acquisition with $23 Billion Deal for Cybersecurity Firm Wiz
Alphabet, the parent company of Google, is in advanced negotiations to acquire the fast-growing cybersecurity startup Wiz for approximately $23 billion, a source familiar with the matter confirmed to CNN. This potential acquisition would be Google’s largest to date, highlighting its significant investment in cybersecurity.
The discussions began after Wiz, which specializes in cybersecurity software for cloud computing, secured $1 billion from venture capital investors earlier this year. While the terms of the deal are not yet finalized and could still fall through, the potential acquisition underscores Google’s commitment to enhancing its cybersecurity capabilities.
The Wall Street Journal initially reported the news of the negotiations. Both Google and Wiz have declined to comment on the matter.
If completed, this deal would surpass Google’s previous largest acquisition, the $12.5 billion purchase of Motorola a decade ago, which Google later sold at a substantial loss. The proposed $23 billion price tag for Wiz is nearly double the startup’s valuation from its most recent funding round.
In March 2022, Alphabet acquired cybersecurity firm Mandiant for $5.4 billion to strengthen its cloud computing business and address increasing cyber threats. Google Cloud is a crucial part of the company’s strategy to diversify its revenue beyond core search advertising. Despite growth in cloud sales, Google has faced stiff competition from Microsoft and Amazon.
Dan Ives, managing director and senior equity research analyst at Wedbush, noted that acquiring Wiz would be a significant move against competitors Microsoft and Amazon, emphasizing Google’s major investment in cybersecurity to bolster its cloud offerings.
The importance of cloud security has surged as companies increasingly migrate data to cloud platforms. Recently, AT&T revealed a massive breach exposing nearly all wireless customers’ call and text records due to an illegal download on a third-party cloud platform.
The ongoing Google-Wiz negotiations occur amid heightened antitrust scrutiny of major tech firms under the Biden administration. However, according to Ives, this scrutiny could lessen if former President Trump were to regain office, potentially leading to a more active merger and acquisition environment for Big Tech.
If finalized, the acquisition would mark a significant exit for Wiz and its founders—Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik. The executives, who met during their service in Unit 8200, the cyber intelligence division of the Israel Defense Forces, have seen their New York City-based company experience rapid growth since its inception in March 2020. Wiz now counts 40% of Fortune 100 companies among its clients, including BMW, Slack, and Salesforce, and collaborates with major cloud providers such as Amazon, Microsoft, and Google.
