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Google parent Alphabet is in advanced talks to acquire fast-expanding cybersecurity startup Wiz for around $23 billion, a source with knowledge of the talks confirmed to CNN.
The acquisition of Wiz, which specializes in cloud computing cybersecurity software, would be Google’s largest acquisition to date, highlighting its significant investment in the cybersecurity sector.
According to sources, the talks between Google and Wiz began after Wiz raised $1 billion in funding from venture capitalists earlier this year. However, the terms of the talks have not yet been finalized and the talks could still fall through.
The Wall Street Journal initially reported the talks between Google and Wiz. Both companies declined to comment when contacted by CNN.
If the deal goes through, it would break the record set by Google’s $12.5 billion purchase of Motorola a decade ago, which it sold two years later at a huge loss.
Wiz’s proposed $23 billion acquisition price is nearly double its $12 billion valuation in its latest round of funding.
In March 2022, Alphabet acquired cybersecurity company Mandiant for $5.4 billion to enhance its ability to respond to cyber threats and strengthen its cloud computing business.
Google Cloud is a key part of Alphabet’s strategy to diversify revenue away from search advertising. Despite growth in cloud sales, Google has struggled to compete with services offered by Microsoft and Amazon.
Dan Ives, managing director and senior equity research analyst at Wedbush, said in a client note on Monday that acquiring Wiz would demonstrate Google’s strong commitment to the cybersecurity space, complement its cloud offerings and challenge Microsoft and Amazon.
Cloud security is becoming increasingly important as companies invest heavily in migrating data to cloud platforms. Last week, AT&T disclosed a major breach that exposed nearly all of its wireless customers’ call and text records due to an “illegal download” on a third-party cloud platform.
The Google-Wizards deal talks are ongoing despite the Biden administration’s intense antitrust scrutiny of big tech companies. However, Dan Ives said that if Donald Trump returns to the White House, such scrutiny could decrease, creating a more favorable environment for mergers and acquisitions among big tech companies.
If finalized, the acquisition would represent a major exit for Wiz and its founders Assaf Rappaport, Ami Luttwak, Yinon Costica and Roy Reznik, who met years ago in Unit 8200, the IDF’s cyber intelligence unit.
New York-based Wiz has experienced rapid growth since its founding in March 2020 amid the COVID-19 pandemic. The company now claims 40% of the Fortune 100 as customers, including big names like BMW, Slack, and Salesforce, and works with major cloud providers like Amazon, Microsoft, and Google.
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