$23 Billion: The AI Company that Just Caught Google's Eye

Well friends, it all makes sense now. Why buy another flashy CRM company for billions when you can snatch up an Israeli founded cybersecurity company that’s (not surprisingly) powered by AI?

Sounds a lot better don’t it?

(Source: Giphy) 

Well Google is thinking the same thing as recent reports say they are now in talks to buy cybersecurity startup Wiz for $23 billion. (For the record, it took every nerve in me not to make any “taking a Wiz” jokes in that last line).

Google, the tech behemoth who knows more about you than your mom does, is not just interested in Wiz because it has a cooler name than Hubspot (obviously), it’s interested in the secret sauce that Wiz holds in its cloud based cybersecurity systems. In short, Wiz’s ability to identify real-time threat responses with its proprietary AI, is apparently second to none…

(Source: Firspost) 

And if Google doesn't buy them, well then AT&T should be next in line… because we all know they legit just shat the bed with their own cybersecurity recently (another story for another time). 

(Source: The Verge) 

But let’s talk numbers shall we, because if we aren’t talking dollars, then what’s the point of even writing about Google right? 

Well according to Wiz, they pulled in about $350 million in revenue last year working with 40% of Fortune 100 companies. Their hit list includes big names like Morgan Stanley and Docusign, while recently raising an additional $1 billion in a funding round that now values them at $12 billion. 

Wait… $23 billion for $12 billion? Math ain’t mathin man!

(Source: Giphy) 

You’re right, it’s not. It’s obvious that the $23 billion price tag is way bigger than what Wiz is currently valued for. But hey if you got the dolla bills to throw around, why not make a statement and shut out all the other potential buyers as well? That’s Google’s strategy with this.

(Source: Giphy) 

Yet, even though they are walking up to the negotiation tables with their big swinging benjamin’s, it’s no secret that Google’s timing here is rather “interesting” to say the least. For those not in the know, the tech world is under Uncle Sam's magnifying glass, with regulators ready to pounce on any hint of monopolistic shenanigans.

(Source: New York Times) 

With antitrust laws being thrown around like “I love you’s” in middle school relationships, acquisition attempts are already treading carefully. But apparently, Google seems to be willing to roll the dice here as they’ve been beefing up their own cloud services to compete with competitors like Microsoft Azure and AWS who are leading the space. 

So with this $23 billion purchase, Wiz could be the secret weapon Sundar Pichai and Co. need to close the gap.

(Source: Yahoo) 

Plus, if this deal goes through, it’ll be Google’s largest acquisition ever (dwarfing their $12.5 billion purchase of Motorola back in 2012.) Which come to find out was a gargantuan mistake only Google could afford to make. 

(Source: Time) 

But again, based on the facts and figures, this could potentially be a golden goose for you Google investors. Why? Well because Google’s cloud revenue grew 26% last year, and they even reported an operating profit for the first time in that segment. So by snapping up Wiz, Google isn’t just adding a feather to its cap; it’s strapping on one of Elon’s jetpacks he probably has somewhere in his garage. 

(Source: Giphy) 

This would, of course, result in more robust cloud offerings and, hopefully, a stock price that models that up-and-to-the-right robustness. 

Now with that said, this deal isn’t signed and sealed… (yet). And based on Google’s track record, talks could fall apart faster than their Hubspot breakup. But if it does go through, Google will definitely be making a loud, expensive statement. 

(Source: Giphy) 

So whether this turns out to be a genius move or just another dusty accolade on its already crowded trophy shelf… Only time will tell.

In the meantime, enjoy the additional cybersecurity AI hype, because we definitely need more of that in this market (said no one ever). 

Stocks.News holds positions in Google, Amazon, Microsoft, and AT&T as mentioned in the article.