Google Nears Its Largest Acquisition Ever

Google’s parent company, Alphabet, is in advanced negotiations to acquire the rapidly expanding cybersecurity startup Wiz for approximately $23 billion, a source familiar with the discussions confirmed to CNN.

Acquiring Wiz, which specializes in cybersecurity software for cloud computing, would signify Google’s largest acquisition to date, highlighting its significant investment in the cybersecurity sector.

Talks between Google and Wiz began following the startup’s $1 billion fundraising from venture capital investors earlier this year, according to the source. However, the terms are not yet finalized, and the negotiations could still fall through.

The Wall Street Journal initially reported the discussions between Google and Wiz. Both companies declined to comment when contacted by CNN.

Should the deal proceed, it would surpass Google’s previous record acquisition of Motorola for $12.5 billion a decade ago. Google sold Motorola just two years later at a substantial loss.

The proposed $23 billion acquisition price for Wiz nearly doubles its $12 billion valuation from the latest funding round.

In March 2022, Alphabet acquired cybersecurity firm Mandiant for $5.4 billion to enhance its capabilities in addressing cyber threats and strengthen its cloud computing business.

Google Cloud is a crucial part of Alphabet’s strategy to diversify its revenue beyond search advertising. Despite growth in cloud sales, Google has struggled to compete with services offered by Microsoft and Amazon.

Acquiring Wiz would signal a strong commitment by Google to the cybersecurity space, complementing its cloud offerings, and posing a challenge to Microsoft and Amazon, noted Dan Ives, managing director and senior equity research analyst at Wedbush, in a client note on Monday.

Cloud security has gained increasing importance as businesses invest heavily in migrating data to cloud platforms. Last week, AT&T disclosed a significant breach exposing nearly all its wireless customers’ call and text records due to an “illegal download” on a third-party cloud platform.

The Google-Wiz deal talks are occurring despite the Biden administration’s intense antitrust scrutiny of major tech companies. However, Dan Ives suggested that if Donald Trump were to return to the White House, this scrutiny might lessen, leading to a more favorable environment for mergers and acquisitions in Big Tech.

If finalized, this acquisition would represent a significant exit for Wiz and its founders—Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik. The four met years ago in Unit 8200, the cyber intelligence division of the Israel Defense Forces.

Since its inception in March 2020 during the COVID-19 pandemic, New York City-based Wiz has experienced rapid growth. The company now claims that 40% of Fortune 100 companies are its clients, including notable names like BMW, Slack, and Salesforce, and collaborates with major cloud providers such as Amazon, Microsoft, and Google.