According to a report by The Wall Street Journal on the 15th, Google’s parent company Alphabet is in advanced negotiations to acquire cybersecurity startup Wiz for approximately $23 billion. If the deal goes through, it will be the largest acquisition in the company’s history.
A Massive Strategic Bet
This acquisition comes at a time when U.S. antitrust scrutiny is intensifying. The U.S. Department of Justice has already filed two antitrust lawsuits against Google. Despite these challenges, Google is pushing forward with this significant merger. Sources say the deal could close soon, but talks might still fall apart.
Wiz, headquartered in New York, was founded in 2020 by former Microsoft executive Assaf Rappaport and several colleagues. It has offices in the U.S. and Israel and collaborates with major cloud computing companies like Amazon, Microsoft, and Google, according to its website.
Despite being only four years old, Wiz has grown explosively with the expansion of cloud computing data centers. In May this year, it raised $1 billion, reaching a valuation of $12 billion. Wiz is one of the few startups outside the AI industry to see its valuation rise during fundraising in 2024. According to CNBC, Wiz’s cloud security products provide comprehensive insights into enterprise cloud operations, proving indispensable for large companies with extensive computing resources.
According to CNN, Wedbush Managing Director and Senior Equity Research Analyst Dan Ives wrote in a client report on the 15th that the acquisition of Wiz indicates Google is making a “big bet on cybersecurity to complement its flagship cloud products.”
The “Cybersecurity News” website commented on the 15th that if finalized, this acquisition will be Alphabet’s largest ever, highlighting its determination to bolster its cybersecurity infrastructure amid rising cybercrime threats. Two years ago, Alphabet acquired cybersecurity company Mandiant for nearly $5.4 billion.
According to the Investor’s Business Daily on the 15th, TD Cowen analyst Shaul Eyal said in a report that the acquisition could stimulate more deals. Earlier this year, Cisco completed a $28 billion acquisition of cybersecurity and analytics firm Splunk. Some Wall Street analysts believe that owning cloud-based cybersecurity stocks is most likely to increase market share. In 2024, Palo Alto’s stock rose 14%, while CrowdStrike’s stock increased by 45%. Both are participants in the cloud security market, including Cloud-Native Application Protection Platform (CNAPP) products and services. According to Bank of America, the CNAPP market is rapidly growing and is expected to increase from $7.2 billion in 2023 to $16.3 billion by 2027.
From Government Agencies to Large Tech Companies
The Nikkei Asian Review reported on the 15th that Indonesia, which has attracted billions in investments from major tech companies, suffered a massive ransomware attack in June, crippling over 280 government agency systems. This isn’t Southeast Asia’s first such incident; previous attacks have hit the Philippines, Malaysia, and others.
The American information technology website “Spiceworks” reported that as technology increasingly intertwines with modern life, the landscape of cyber threats has evolved. In recent years, companies have invested heavily in moving data to cloud platforms, making cloud security crucial. Companies like Facebook, Google, Microsoft, and Amazon collect vast amounts of data, making them lucrative targets for cybercriminals.
Just last year, Norton, MailChimp, X, Verizon, Google, Activision, ChatGPT, T-Mobile, Microsoft, Walmart, Samsung, Fujitsu, American Express, and others experienced cyberattacks. CNN reported that last week AT&T revealed a massive leak of call and text records of nearly all its wireless customers due to “illegal downloads” from a third-party cloud platform. According to IBM, the average cost of a single data breach in 2023 was $4.45 million. By 2025, the evolution of these (attack) targets is expected to cause trillions in global economic losses. Such attacks can result in severe consequences, including reputational damage, economic losses, and legal challenges.
What Can Be Done?
“Spiceworks” also noted that the interconnectedness of the digital ecosystem means vulnerabilities in one industry can affect multiple verticals. These threats exploit dependencies in the supply chain, increasing the potential destructiveness of cyberattacks. Disruptions in major tech companies’ operations, especially when their software supply chains are attacked, can have a ripple effect, impacting businesses, governments, and individuals worldwide.
Pan Helin, a well-known economist and a member of the Expert Committee on Information and Communications Economics of the Ministry of Industry and Information Technology, told the Global Times on the 16th that data is a new production element for large tech companies. Google’s two core businesses—search and artificial intelligence—rely on data. Data creates value for Google, so the company has a responsibility to protect data security. This heightens the demand for cybersecurity in tech companies, with cloud security being the current trend in cybersecurity development.
In the future, large tech companies will continuously enter the cloud security industry. They have the capability to deploy security infrastructure and, after implementing cloud security themselves, may eventually offer cloud security services to others.
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