(Bloomberg) — Google parent Alphabet Inc. is in talks to acquire cybersecurity startup Wiz Inc., according to a person familiar with the matter.
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The transaction could total up to $23 billion, said the person, who asked not to be identified discussing nonpublic information. That would make this the tech giant’s biggest acquisition to date.
An agreement has not been reached and talks could still end without a deal, the source said.
An Alphabet representative did not immediately respond to requests for comment. A spokesperson for Wiz declined to comment. The talks were previously reported by the Wall Street Journal.
The talks come on the heels of Alphabet’s efforts to acquire customer relationship management company HubSpot Inc., which Bloomberg News reported last week. As was the case with the HubSpot deal, a potential acquisition as large as Wiz’s is unusual for a major technology company like Alphabet, given the heightened scrutiny the company faces from antitrust regulators.
Google already faces several antitrust challenges, including a lawsuit filed by the US Department of Justice that accuses it of abusing its dominant position in online search and another over its digital advertising tools.
Alphabet has been increasing its investment in cloud customer businesses, including offering more generative artificial intelligence tools to customers. Although Google still lags behind Microsoft Corp. and Amazon.com Inc. in the cloud computing market, the company said its cloud unit has been profitable in consecutive quarters after years in which the unit was a loss-making operation.
The acquisition of Wiz, a cloud and cybersecurity company, could help Google catch up to Microsoft and Amazon in an increasingly competitive cloud market.
As more startups move their applications and data to the cloud, opportunities in the sector are growing, especially as generative AI applications and tools continue to gain traction. These tools often require huge data sets to be uploaded to the cloud, where AI models can train, so they can generate results such as images, marketing campaigns, or software code, based on what users ask the AI software to do. generative.
New York-based Wiz connects to cloud storage providers such as Amazon Web Services or Microsoft Azure and identifies and scans data stored in the cloud, looking for and removing security risks. The company, founded in 2020, was valued at $12 billion during a funding round in May that attracted investors including Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital.
An Alphabet deal for Wiz would follow its $5.4 billion purchase of cybersecurity company Mandiant Inc. in 2022. This was the company’s second-largest acquisition, surpassed only by the deal for Motorola Mobility Holdings LLC completed in 2012 , according to data compiled by Bloomberg.
–With assistance from Liana Baker and Ryan Gould.
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