Alphabet in Talks to Acquire Cybersecurity Startup Wiz

Google’s parent company, Alphabet, is reportedly in discussions to acquire cybersecurity startup Wiz, according to a source familiar with the matter. The potential transaction could reach up to $23 billion, which would mark Alphabet’s largest acquisition to date.

However, an agreement has not yet been finalized, and discussions could still fall through, the source cautioned. Representatives for both Alphabet and Wiz declined to comment on the ongoing talks. The Wall Street Journal initially reported the news.

These discussions follow Alphabet’s decision to halt efforts to acquire customer relationship management company HubSpot. Acquiring Wiz, a deal of this magnitude, is notable for Alphabet, especially given the intense scrutiny the tech giant faces from antitrust regulators.

Google is currently contending with several antitrust challenges, including a lawsuit from the U.S. Justice Department alleging abuse of its dominant position in online search, and another lawsuit related to its digital advertising tools.

Alphabet has been intensifying its investments in its cloud customer business, introducing more generative artificial intelligence tools for clients. While Google remains behind Microsoft and Amazon in the cloud computing market, its cloud unit has recently reported consecutive profitable quarters after years of losses.

Acquiring Wiz, a cloud and cybersecurity firm, could bolster Google’s position against Microsoft and Amazon in the competitive cloud market. As startups increasingly move their applications and data to the cloud, the sector’s growth potential is expanding, particularly with the rise of generative AI apps and tools. These tools require large datasets to be uploaded to the cloud for AI models to train on, enabling them to generate outputs such as images, marketing campaigns, or software code based on user prompts.

Founded in 2020 and based in New York, Wiz connects to cloud storage providers like Amazon Web Services and Microsoft Azure, scanning stored data for security risks. In a May funding round, the company was valued at $12 billion, attracting investors such as Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital.

If Alphabet proceeds with the acquisition, it would follow its $5.4 billion purchase of cybersecurity firm Mandiant in 2022, which was its second-largest acquisition after the deal for Motorola Mobility Holdings in 2012.

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