Alphabet, the parent company of Google, is reportedly in advanced negotiations to acquire cybersecurity startup Wiz for approximately $23 billion, according to sources familiar with the matter.

The deal first reported by the Wall Street Journal would mark Alphabet's largest acquisition to date, far surpassing its previous record of $12.5 billion for Motorola Mobility in 2012.

Founded in 2020, Wiz has experienced rapid growth in the cloud computing security sector. The New York-based company, with additional offices in the US and Israel, achieved $350 million in annual recurring revenue in 2023. Wiz's innovative cybersecurity software for cloud computing has attracted high-profile clients, including Fortune 100 companies.

The potential acquisition comes at a time of intense scrutiny for tech giants, with Alphabet currently awaiting a verdict in an antitrust lawsuit regarding its search business. However, this move could significantly bolster Alphabet's position in the competitive cloud computing market, where it currently trails behind Amazon and Microsoft.

Wiz's valuation has soared since its inception, with the company raising $1 billion earlier this year at a $12 billion valuation. The startup is backed by prominent Silicon Valley venture capitalists, including Sequoia Capital and Andreessen Horowitz.

The deal, if finalised, would represent a rare major acquisition in the current tech landscape, where regulatory concerns and high interest rates have deterred large-scale mergers and acquisitions. It would also provide a notable exit for Wiz's investors amid a stagnant IPO market.

Alphabet's interest in Wiz aligns with its efforts to strengthen its cybersecurity offerings, following its $5.4 billion acquisition of Mandiant in 2022. The potential deal highlights the growing importance of cybersecurity in the tech industry, as evidenced by Cisco's recent $28 billion takeover of Splunk.

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