Alphabet, Google’s parent company, announced on Tuesday, March 18, that it would acquire Wiz in its largest deal valued at approximately $32 billion.
Currently, the mentioned technology giant, which ownership structure includes the most popular Internet search engine at the moment, pays special attention to cybersecurity issues. The corresponding priority is related to Alphabet’s desire to strengthen its position in the cloud computing race. Major companies such as Microsoft and Amazon are also participating in the mentioned race. The acquisition of Wiz, which operates in the cybersecurity area, is consistent with the implementation of Alphabet’s specified priority in the practical plane.
The all-cash buyout comes after Wiz rejected a $23 billion offer from the mentioned technology giant last year. At that time, a startup operating in the cybersecurity sector has stated concerns about antitrust approvals and its goal to focus on an initial public offering (IPO) of shares.
The acquisition of Wiz will allow Alphabet to bolster its cloud business with cybersecurity solutions powered by artificial intelligence. Companies use similar functional solutions to eliminate critical risks. For Alphabet, the opportunity to offer Wiz products to its customers means increasing competitiveness and benefiting from the increased number of generative machine intelligence services such as ChatGPT.
Wiz chief executive officer and co-founder Assaf Rappaport stated that cloud technologies are now more important than ever, and noted that attackers are not slowing down, using the most innovative solutions to move faster. It is worth mentioning that the head of the startup described the previous acquisition offer from Alphabet as humbling.
Last year, the harsh regulatory climate prevented the conclusion of such large-scale deals. Currently, there is an optimistic perception on Wall Street regarding the prospects that the antitrust policy of the President of the United States, Donald Trump, will be able to generate a new momentum for dealmaking.
Wiz is one of the fastest-growing software startups. In May last year, during the financing round, the brand was valued at $12 billion. The startup cooperates with cloud providers such as Amazon Web Services, Microsoft’s Azure and Google Cloud. Wiz’s clients include Morgan Stanley, BMW, and luxury powerhouse LVMH.
After the deal closes, the startup will join the Google Cloud business, which revenue for 2024 was recorded at the mark exceeding $40 billion. Also in past years, Google Cloud outpaced growth in the search business.
It is worth noting separately that Wiz products will continue to be available in all other major cloud services. Alphabet expects the deal to acquire the startup to be completed next year. The implementation of the relevant forecast is possible only with timely approval from regulators.
D.A. Davidson analyst Gil Luria stated that the deal’s higher value relative to the 2024 figure is due to another year of exponential growth for Wiz. The expert also noted that for Google to be able to compete with Microsoft Azure for enterprise clients, it needs to offer a deeper suite of services, including security software.
This is not the first time Alphabet has struck a big deal for a cybersecurity company. In 2022, Mandiant joined technology giant’s ownership structure. The value of the relevant deal was $5.4 billion.
As of December 31, according to media reports, Google had $23.47 billion in cash. This means the likelihood that additional funds will be needed to finance the deal to acquire Wiz.
Interest in the cybersecurity industry has grown since last year’s global CrowdStrike outage. This incident provoked failured operations in various industries. Against the mentioned background, companies began to spend more on safeguarding their online domains.
Moreover, it is worth noting the growing relevance of the issue of cybersecurity due to the active development of advanced technologies, including artificial intelligence. Scammers also have access to AI tools, which is why their activities have become more sophisticated. To counteract the corresponding threat in a virtual environment, personal awareness of users is important. For example, an Internet search query such as how to know if my camera is hacked will allow anyone to get information about signs of unauthorized access to the device. Digital literacy is an effective tool for countering cybercrime. At the same time, relevant knowledge should be updated periodically, as criminals strive to use the most advanced technologies in their activities. It is worth noting that artificial intelligence can be used not only by scammers, but also against them. AI has already demonstrated its ability to detect suspicious activity in the virtual space. In the vast majority of cases, cybercriminals aim to steal their victims’ money. Artificial intelligence is gradually becoming a tool to combat this activity, but nevertheless users should continue to be very careful and very attentive when performing operations in virtual space.
