Google's parent company Alphabet is reportedly in advanced discussions to acquire cybersecurity startup Wiz for approximately $23 billion.
The deal, which would mark the technology giant's largest purchase to date, is expected to be primarily financed in cash and could be finalized soon, according to Wall Street Journal, which first reported it.
Wiz, which was founded in Israel and is now headquartered in New York, has rapidly become a leading player in the software industry, offering cloud-based cybersecurity solutions with AI-powered real-time threat detection and response.
Wiz reported about $350 million in revenue for 2023 and collaborates with 40% of Fortune 100 companies, according to its website.
The startup is backed by key investors, including Israeli venture capital firm Cyberstarts, Index Ventures, Insight Partners, and Sequoia Capital.
The company recently secured $1 billion in a private funding round, valuing it at $12 billion.
Wiz's client base includes multiple cloud providers such as Microsoft and Amazon, with prominent customers like Morgan Stanley and DocuSign.
The startup employs 900 people across the U.S., Europe, Asia, and Israel, and has plans to hire an additional 400 workers globally in 2024.
Should Alphabet proceed with this deal, it would be an exceptional instance of a major tech company pursuing a significant acquisition amid increased regulatory scrutiny under President Joe Biden's administration.
The Justice Department has filed two separate antitrust lawsuits against Google—one targeting its dominant search engine and another aiming to dismantle its digital advertising technology business.
Under Biden's administration, regulators have intensified scrutiny of major tech acquisitions and corporate consolidations.
This hardline approach has led to the blocking of several high-profile deals, such as Penguin Random House's $2.18 billion bid for Simon & Schuster and JetBlue's $3.8 billion acquisition of Spirit Airlines.
Amazon abandoned its $1.7 billion acquisition of iRobot due to regulatory pushback, and the Federal Trade Commission's attempt to block Microsoft's purchase of Activision was unsuccessful.
Google has long sought to diversify its revenue streams beyond online advertising, yet its search engine, YouTube, and other platforms still account for 75% of its income.
The acquisition of Wiz, though not an immediate game-changer, would strengthen Google Cloud's connections with companies that rely on Wiz to secure data across AWS, Azure, and other cloud systems.
The potential acquisition follows Alphabet's recent decision to forgo a takeover of online marketing software company HubSpot.
