Google may be considering its biggest acquisition ever in a bold, cloud-boosting move
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Off to buy the Wiz… Money’s burning a hole in Google parent Alphabet’s pocket: it’s said to be in late-stage talks to acquire cloud cybersecurity company Wiz for $23B. It would be Alphabet’s largest deal ever, giving its cloud biz — which lags behind Microsoft’s and Amazon’s — a stronger selling point to lure hack-wary customers. Most genAI tools run on cloud servers, and security is a top concern for corporate clients.
Wiz kid: Four-year-old Wiz, which offers cybersecurity services like real-time threat detection, raised $1B earlier this year at a $12B valuation — a rarity for non-AI startups these days.
Fortification: By bolstering Google’s cloud biz, a Wiz-quisition could help the search giant diversify from advertising, where it makes most of its money. Google’s cloud revenue reached $9.6B in Q1, compared to advertising’s ~$62B.
Tech is securitymaxing… The # of US data breaches rose 78% last year, and 82% of them involved data stored on the cloud. AT&T recently said that hackers, through a third-party cloud-storage company, accessed six months’ worth of call and text records of nearly all its customers. The US gov’t blasted Microsoft over its inability to stop Chinese hacks earlier this year. As data breaches make more headlines, companies are investing in security to restore trust. Cybersecurity spending is expected to reach $215B this year, up 14%. Google’s second-largest acquisition ever was of cybersecurity company Mandiant, which it bought two years ago for $5.4B.
Risk it for the cloud biscuit… If Google does go through with this acquisition, antitrust scrutiny would almost certainly follow. On X, Sen. Richard Blumenthal called it an example of “how to enrage enforcers.” But the tech behemoth, already facing two massive antitrust lawsuits and investigations from EU regulators, may still opt to make the offer to get ahead in the lucrative cloud game.