Why Google is ready to risk a DC battle to land a potential $23 billion deal

Google may be about to announce a takeover of cloud cybersecurity startup Wiz, but could face a battle with regulators to get the deal approved.

• Google might be set to make its biggest acquisition ever.
• Its target is a cybersecurity startup called Wiz, The Wall Street Journal reported.
• The potential $23 billion deal could boost Google's cloud unit at a time when AI is driving demand.

Google might be getting ready to shell out a record amount on an acquisition. The company in question is a four-year-old startup that could turn its AI empire into a fortress.

On Sunday, The Wall Street Journal reported that the search giant is seeking to buy Wiz, a New York-based startup founded in 2020 by former members of the Israeli military's Unit 8200 intelligence unit.

The deal could be worth as much as $23 billion — and would mark an extraordinary moment for Wiz.

The young company specializes in cybersecurity for cloud computing — not the AI foundation models that startups in the tech sector such as OpenAI and Anthropic have shown off to secure billions of dollars of investment.

Wiz has worked with the likes of Morgan Stanley, LVMH, Shell, Mars, and Blackstone to help them secure the operations they want to build and run in the cloud.

A deal, then, would give Wiz a chance to pull off a rare feat in tech's generative AI era: scale valuation as a company that isn't shouting about AI at every moment. Wiz, which was valued at $12 billion after announcing a $1 billion fundraising in May, puts "cloud security" front and center.

For Google, however, Wiz's cybersecurity services promise to bolster its cloud operations at a time when AI has made it vital to do that.

Google has lagged behind rivals including Amazon and Microsoft on cloud, but has won more business during the generative AI boom as corporate customers demand services that can help them build, host, and maintain AI services and data. That's made it more responsible than ever for the work of customers trying to make headway in the AI field.

In the cloud

In the first three months of the year, revenues at Google's cloud unit posted a 28% year-on-year jump to $9.6 billion, for instance. With generative AI not showing signs of going away, Google can expect that trend to continue.

Still, maintaining the upward trajectory will involve showing customers that its cloud offerings are as secure as possible. Analysts at Wedbush including Dan Ives said in a research note that a Wiz deal "would clearly bolster the Google cloud offering and value proposition to enterprises."

Although talks seem to be at an "advanced" stage, per the Journal, there are no details yet on how Wiz would be integrated into Google following an acquisition, or the extent to which Wiz's cybersecurity services would run across the AI applications hosted in Google Cloud. Google did not immediately respond to a request for comment from Business Insider.

'Monopoly power'

A potential deal may face intense scrutiny from regulators. Antitrust concerns from the FTC have weighed on deal activity in the tech sector in recent years, leading Big Tech firms in particular to tread with caution.

On Sunday, Sen. Richard Blumenthal pointed on X to a report on the looming deal as one that would be "for the antitrust textbooks" — an example, he said, of "how to enrage enforcers & elude law & logic in pursuing monopoly power."

A decision from Google to push on regardless will show just how important it thinks cybersecurity is for the AI-cloud future.