Google’s attempt to acquire Israeli cybersecurity startup Wiz for $23 billion has fallen through, which could have significant repercussions for the tech sector, especially for Microsoft.
Wiz CEO Assaf Rappaport announced on Tuesday that the company had decided to reject Google’s offer. He emphasized that this difficult choice was made to focus on growing Wiz towards an annual revenue goal of $1 billion and preparing for an initial public offering (IPO).
The proposed acquisition would have strengthened Google’s position in cybersecurity, particularly in light of a major outage caused by CrowdStrike, a key player in the industry, just before the deal fell apart. According to Wedbush analyst Dan Ives, investor uncertainties and ongoing antitrust issues played a major role in the deal’s cancellation. Google has faced elevated antitrust scrutiny in recent years and has recently completed a trial concerning two significant cases brought by the Department of Justice.
Ives noted that the failure of this acquisition is expected to have widespread effects throughout the technology sector. He suggested that Google is likely to enhance its cybersecurity initiatives independently and that Microsoft might also seek to expand its cyber capabilities in the next 12 to 18 months.
Microsoft faced criticism amid the global IT outage linked to a flawed update from CrowdStrike on Friday, which disrupted numerous businesses and services worldwide. While Ives still regards CrowdStrike as a leading cybersecurity firm, the incident indicates a need for Microsoft to enhance its cybersecurity efforts further, particularly now that Google’s potential partnership with Wiz is off the table.