- Google may be making its biggest acquisition yet.
- According to the Wall Street Journal, the target was a cybersecurity startup called Wiz.
- The $23 billion acquisition could revitalize Google's cloud division at a time when AI is driving demand.
Google may be preparing to spend a record amount to acquire a four-year-old startup that could turn its AI empire into a fortress.
The Wall Street Journal reported Sunday that the search giant is considering acquiring Wizz, a New York-based startup founded in 2020 by former members of the Israeli military's intelligence unit, Unit 8200.
The deal could be worth as much as $23 billion and marks a special moment for the Wiz.
The young company specializes in cybersecurity for cloud computing, not the AI-based model that tech startups such as OpenAI and Anthropic have touted to secure billions of dollars in investment.
Wiz has worked with companies such as Morgan Stanley, LVMH, Shell, Mars and Blackstone to help secure the operations they build and run in the cloud.
The acquisition gives Wizz a chance to achieve a rare feat in the AI-generated era of technology: Raise its valuation as a company that doesn't always shout about AI. Wizz, which announced a $1 billion funding round in May and is valued at $12 billion, has made “cloud security” a top priority.
But for Google, Wiz's cybersecurity services promise to bolster its cloud operations at a time when AI has made them essential.
While Google has lagged behind rivals like Amazon and Microsoft in the cloud space, it's winning more business amid a generative AI boom as enterprise customers seek services that help them build, host and maintain their AI services and data. That puts Google under greater responsibility than ever for the work of its customers as they move forward in the AI field.
In the cloud
For example, in the first three months of this year, Google's cloud division saw revenue reach $9.6 billion, up 28% year over year, and with generative AI showing no signs of going away, Google can expect this trend to continue.
Still, to maintain its upward trajectory, Google needs to show customers that its cloud services are as secure as possible.The Wizz deal “will clearly strengthen Google's cloud services and value proposition to the enterprise,” Wedbush analysts including Dan Ives said in a research note.
The WSJ said the talks are at an “advanced” stage, but details have yet to be revealed, including how Wiz will be integrated into Google after the acquisition and the extent to which Wiz's cybersecurity services will run on AI applications hosted on Google Cloud. Google did not immediately respond to Business Insider's request for comment.
“Monopoly power”
Any potential deal could face intense regulatory scrutiny: FTC antitrust concerns have weighed heavily on tech deal activity in recent years, causing big tech companies in particular to tread cautiously.
Sen. Richard Blumenthal, D-X, on Sunday called the report on the impending deal “something straight out of an antitrust textbook” and an example of “how to infuriate enforcement agencies and circumvent law and logic in the pursuit of monopoly power.”
Still, Google's decision to move forward shows how important the company thinks cybersecurity is to the future of its AI cloud.
