Alphabet in talks to buy Visa in $23 billion cyber deal

Google owner Alphabet Inc. is in talks to acquire cybersecurity startup Wiz Inc., according to a person familiar with the matter.

The deal could be worth as much as $23 billion, said the person, who asked not to be identified discussing non-public information. That would make it the tech giant’s largest acquisition to date. No agreement has been reached, and talks could end without one, the person said.

An Alphabet representative did not respond to requests for comment. A Wiz spokesman declined to comment.

Alphabet already owns cybersecurity company Mandiant, which it bought two years ago for $5.4 billion in its second-largest acquisition, trailing only its 2012 deal for Motorola Mobility Holdings LLC. An acquisition target as large as Wiz would be unusual for a big tech company like Alphabet and could draw even more scrutiny from antitrust regulators.

Google already faces several antitrust challenges, including a lawsuit from the U.S. Department of Justice accusing the company of abusing its dominant position in the internet search market and a lawsuit over its digital advertising tools.

The Wiz talks, previously reported by the Wall Street Journal, follow Alphabet’s decision to drop its bid to acquire customer relationship management company HubSpot Inc., which Bloomberg News reported last week.

Google shares, which have gained more than 33% this year, were up about 1% to $186.54 at 1 p.m. on the New York Stock Exchange.

New York-based Wiz connects to cloud storage providers like Amazon Web Services and Microsoft Azure and scans data stored there for security threats. The company, founded in 2020, was valued at $12 billion in a funding round in May that attracted investors like Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital.

The acquisition of Wiz could help Google catch up with Microsoft Corp. and Amazon.com Inc. in the increasingly competitive cloud services market.

Alphabet is increasing investment in its cloud business for customers, including offering more generative AI tools to customers. While Google still lags behind Microsoft and Amazon in the cloud services market, the company said its cloud unit was profitable in back-to-back quarters, after years when the unit was a loss-making operation.

The opportunities in this space are growing as more startups move their apps and data to the cloud, especially for generative AI. AI tools are trained on massive data sets and often require massive amounts of computing power to generate content such as images, marketing campaigns, or software code.

Alphabet’s acquisition of Wiz could also intensify Google’s competition with Microsoft, the world’s largest cybersecurity vendor. Microsoft has been hit by a series of embarrassing hacks in recent years that have exposed corporate and government customers. A U.S. government report earlier this year criticized the company for failing to prevent hackers linked to the Chinese government from stealing the emails of American officials.

Google is betting that Microsoft’s very public cybersecurity blunders — along with big discounts — will convince corporate and government customers to use the search giant’s productivity software instead of Office. In May, the company published a white paper highlighting its rival’s security flaws and was considering launching similarly themed advertising and social media campaigns.

Google also offered a year of free subscription to government agencies that move 500 or more users to Google Workspace Enterprise Plus over a three-year period. The company also said they would be eligible for a “significant discount” for the remaining term of the contract.

2024 Bloomberg LP Distributed by Tribune Content Agency, LLC.