Google is close to making the biggest acquisition in its history

Google owner Alphabet is in advanced talks to buy fast-growing cybersecurity startup Wiz for about $23 billion, a person familiar with the matter has confirmed to CNN.

The acquisition of Wiz, which makes cybersecurity software for cloud computing, would be a major step forward for Google in the cybersecurity space and would be the largest acquisition in the tech giant’s history.

Talks between Google and Wiz began after the startup raised $1 billion from venture capitalists earlier this year, the source said.

According to the source, the terms of the potential deal have not yet been agreed and the talks could end in failure anyway.

Information about the Google-Wiz talks was first reported by The Wall Street Journal.

Neither Google nor Wiz responded to CNN’s request for comment.

The deal would easily surpass Google’s $12.5 billion purchase of Motorola about a decade ago, the largest acquisition in the company’s history. Google divested Motorola just two years later at a massive loss.

Wiz’s $23 billion price tag is almost double the $12 billion the startup was valued at in its last funding round.

In March 2022, Alphabet acquired cybersecurity company Mandiant for $5.4 billion as part of a move to help enterprises better address cyber threats and strengthen their cloud computing businesses.

Google Cloud is the centerpiece of the company’s efforts to diversify revenue beyond its core search advertising business. While cloud sales have grown, the company has struggled to compete with similar services from Microsoft and Amazon.

The purchase of Wiz would be a “shot in the face” for Microsoft and Amazon, showing that Google is “taking a big step into cybersecurity to complement its flagship cloud offering,” Dan Ives, managing director and senior analyst of equity research at Wedbush, wrote in a note to clients on Monday.

Cloud security has become especially important in recent years as companies have spent a lot of money moving data to cloud platforms. Just last week, AT&T revealed that nearly all of its wireless customers’ call and text message records had been exposed in a massive breach caused by “illegal downloads” on a third-party cloud platform.

The Google-Wiz deal talks are ongoing despite the Biden administration’s intense antitrust scrutiny of the tech giants.

However, Ives said, antitrust scrutiny could be somewhat reduced if Trump is returned to the White House, making the Federal Trade Commission “significantly weaker” and creating an “accelerated mergers and acquisition environment for big tech companies.”

If the acquisition is finalized and closed, it would mean a huge exit for Wiz and its founders — Assaf Rappaport, Ami Luttwak, Yinon Costica and Roy Reznik. The four executives met years ago when they were drafted into Unit 8200, the IDF’s cyber intelligence unit.

Since launching in March 2020 during the Covid-19 pandemic, New York-based Wiz has enjoyed explosive growth. The company now claims 40% of the Fortune 100 are its clients.

The company’s well-known clients include BMW, Slack, and Salesforce, and it also works with major cloud computing companies, including Amazon, Microsoft, and Google.

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