
Google is negotiating a potential $23 billion acquisition of cloud security startup Wiz, aiming to strengthen its position in the competitive cloud computing market. This deal, if completed, would mark Google's largest acquisition ever.
Wiz, founded just four years ago by former Microsoft employees, has quickly become a major player in cybersecurity. The New York-based company offers a platform that helps businesses secure their applications across multiple cloud environments, including those run by Google, Microsoft, and Amazon.
The startup's growth has been impressive. Wiz reportedly generated $350 million in annualized revenue last year, attracting $1.9 billion in funding from prominent investors like Lightspeed Venture Partners and Index Ventures.
For Google Cloud, which trails behind market leaders Amazon Web Services and Microsoft Azure, this acquisition could be a game-changer. Thomas Kurian, Google Cloud's CEO, is reportedly spearheading the deal, seeing it as a strategic move to enhance the company's cloud security offerings and attract more enterprise customers.
However, the deal faces potential hurdles. Negotiations are ongoing, with discussions centered on performance-based payouts for Wiz employees. There are also concerns about regulatory scrutiny, given the current antitrust climate surrounding major tech companies.
The timing is notable, as Google awaits a ruling on a Department of Justice antitrust lawsuit regarding its search business, with another suit on its advertising practices looming. While Google's cloud business faces less scrutiny due to its smaller market share, a $23 billion deal is likely to draw attention from regulators.
If successful, Google would pay a significant premium over Wiz's recent $12 billion valuation, set during a May funding round. This high price reflects both Wiz's rapid growth and the strategic importance Google places on bolstering its cloud security capabilities.
Wiz’s technology aligns well with Google’s strategy to enhance its security offerings, particularly in the cloud. By acquiring Wiz, Google aims to bolster its reputation as a secure cloud platform. This move is especially significant as businesses increasingly prioritize cybersecurity, particularly in the context of AI applications and services.
Wiz’s AI Security Posture Management (AI-SPM) helps organizations secure their AI pipelines and manage risks across the AI lifecycle. This is crucial as AI models and services become integral to modern business operations, posing new security challenges. Google's willingness to invest heavily in this area underscores the importance of security in driving cloud adoption and maintaining customer trust.