Google’s parent company Alphabet is in advanced talks to buy Wiz. According to the Wall Street Journal, which broke the story, the deal would value the cybersecurity startup at $23bn. If agreed, the price would constitute the largest amount ever spent by Alphabet on an acquisition.
Neither party has officially confirmed talks are underway. Negotiations are also taking place under a cloud, with Alphabet under significant antitrust scrutiny worldwide. The search giant has already been sued twice in the past year by the US Department of Justice (DoJ) for violations of competition law by its digital advertising arm and its search engine. A verdict in the latter suit is expected later this year.
Wiz purchase would burnish Google’s cloud security credentials
Founded in 2020, Wiz markets itself as a cloud-based cybersecurity firm. “Siloed security tools and scanners – even best in class – simply can’t provide the perspective that today’s security professionals need,” argued its chief executive, Assaf Rappaport, in a quote posted on the firm’s website. Wiz also claims to protect up to five million cloud workloads and counts 40% of Fortune 100 companies as customers.
Alphabet likely views the cybersecurity startup as a means to enhance its cloud security credentials and forge new connections with major Wiz customers like Slack, BMW and Siemens. Though its market share lags behind competitors AWS and Microsoft Azure, Google Cloud is widely considered the junior firm in the triumvirate of hyperscalers currently dominating the global cloud computing sector. Indeed, the division’s chief executive, Thomas Kurian, has been the foremost advocate within Alphabet for the company to buy Wiz, according to the New York Times.
A hostile regulatory environment
Whether or not Alphabet will receive global regulatory approval for the deal remains unknown. Google itself has weathered hostility from competition watchdogs for at least a year, enduring not only two trials in the US concerning its alleged dominance of the digital ads and search markets but also increased scrutiny in Europe over its increasing presence in the AI value chain.
In the EU, the big tech giant could face a probe into its recent deal with Samsung to pre-install its ‘Gemini nano’ AI model onto the latter’s phones, while in the UK the Competition and Markets Authority has identified Google as one of six major firms that oversee what it describes as an “interconnected web” of 90 investments and partnerships within the generative AI field.
If approved, Google’s purchase of Wiz would add to the list of major cybersecurity acquisitions in the past twelve months. These include Cisco’s takeover of Splunk in September 2023, HPE’s purchase of Juniper Networks and Synopys’s $35bn bid for Ansys, an engineering software startup.
