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Equity

Google’s talks to buy Wiz, and the gap between AI spending and AI revenue

Equity

TechCrunch

Founders, Silicon Valley, Finance, Ipo, Vc, Technology, Business News, Startups, Business, Venture Capital, News, Stock Market, Entrepreneurship, Techcrunch

4.2365 Ratings

🗓️ 15 July 2024

⏱️ 8 minutes

🧾️ Download transcript

Summary

On today’s episode of Equity, Rebecca Bellan explored Google’s reported talks to acquire Wiz, a cloud security company, for around $23 billion. Wiz provides an “all-in-one approach to cloud security,” pulling data from Amazon Web Services, Microsoft Azure, Google Cloud and others, then scanning it all for security risk factors – something that Google might see as a good way to fortify its own cloud business, which grew 28% to $9.57 billion in Q1 this year. We also discussed a letter from OpenAI whistleblowers who say the AI company has placed illegal restrictions on how employees can communicate with government regulators. They say OpenAI’s NDAs prohibit and discourage employees and investors from communicating with the SEC over securities violations, and forced employees to waive their rights to whistleblower incentives and compensation, among other things. Bellan also talked about the paradox of how much money is being invested into AI versus how much money it’s making. In the first half of 2024 alone, more than $35.5 billion was invested into AI startups globally, per Crunchbase data. As these AI startups gain force, other companies hopping on the generative AI train want more than the assurance of trigger happy VCs and eye-popping valuations before they pull out their wallets. They want to know that this tech will improve business performance and revenue, as promised. Because after all, many experts say the promise of AI will take much longer to come to fruition than the current investment frenzy suggests, something that they also say could lead to an AI bubble bursting. Finally, we touched on the return of e-bike startup darling VanMoof, and how its new owners want to win over old customers. Their audacious strategy involves offering customers who never got their e-bikes before VanMoof went bankrupt a €1,000 discount off a new bike. Why not just refund those customers? Well, VanMoof’s new owners don’t have access to that customer money, which is tied up in bankruptcy proceedings. Will this strategy be enough to lure back jilted customers? We’ll soon find out.

Transcript

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0:00.0

Hello and welcome back to Equity, Tech Crunch's flagship podcast about the business of startups.

0:15.4

Today is July 15, 2024. I'm Rebecca Belan, a senior reporter here at Tech Crunch and this is our Monday show

0:21.9

where we take a look at the weekend and get you ready for the week ahead.

0:24.7

On today's show we have Google's next acquisition, Open AIs, NDA's,

0:30.0

the AI Financial Results Paradox,

0:32.6

and what happened after Van Moof went Van Poof.

0:35.6

Let's get started.

0:36.6

First up, Google is reportedly in talks to acquire Wiz, a cloud security company, for around $23 billion.

0:46.0

The deal is not yet finalized, according to the Wall Street Journal, but it could come together soon.

0:51.0

So what exactly does Wiz offer? Well, the company provides an all-in-one approach to

0:55.2

cloud security, pulling data from Amazon Web Services, Microsoft Azure, Google Cloud, and other

1:01.0

cloud platforms, then scanning it all for security risk factors.

1:05.2

The deal comes just two months after Wiz raised a $1 billion series E at a $12 billion valuation.

1:11.7

So why this acquisition and why now? Well Google's

1:14.5

cloud business grew 28% to 9.57 billion dollars in the first quarter of this

1:20.3

year. So this buy could be a way for alphabet to fortify that business, particularly as

1:25.3

cyber hacks abound. Recall that last week AT&T confirmed it had been hacked in a breach

1:30.4

that was linked to a compromise from a different cloud data giant called Snowflick.

1:35.0

Snowflakes customers whose data was stolen also include Ticketmaster and Lending Tree subsidiary

1:40.9

Quote Wizard, among others.

1:42.6

Google's acquisition of whiz, if it happens,

1:44.7

would undoubtedly be good for business to keep customer cloud data safe,

...

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