Wiz, a rapidly growing cloud security startup, is capitalizing on the AI boom as it races toward an initial public offering after reaching $500 million in annual recurring revenue (ARR). The company, which famously turned down a $23 billion takeover offer from Google earlier in 2024, is now targeting $1 billion in ARR before going public.
Founded in March 2020 by four entrepreneurs who previously sold their company Adallom to Microsoft, Wiz has raised over $1.9 billion in funding from prominent investors including Andreessen Horowitz, Thrive Capital, and Index Ventures. The company provides cloud security services that help organizations identify risks in their cloud infrastructure—a service that has become increasingly critical as AI adoption accelerates.
According to Raaz Herzberg, Wiz’s Chief Marketing Officer and VP of Product Strategy, the AI revolution has supercharged the company’s growth trajectory. “The adoption of AI is very similar to what happened with the accelerated use of cloud,” Herzberg explained. The company has discovered that over 80% of its customers are now using AI services, which typically run on public cloud infrastructure, creating expanded security needs.
Wiz has aggressively pursued growth through acquisitions, purchasing security startups Rafft, Gem, and Dazz in 2024 to enhance its engineering talent and product offerings. The company’s strategy involves rebuilding acquired technologies from scratch within Wiz’s infrastructure rather than simply reselling existing products.
In August 2024, Wiz established its European headquarters in London, targeting 35% of its revenue from the European market. The company already works with major clients including Revolut, Tide, and BMW. Herzberg emphasized that Europe’s stricter security and privacy requirements make it an ideal market for Wiz’s technology.
The startup is currently searching for a Chief Financial Officer—a key hire typically required before an IPO. While Herzberg stated the company is in “no rush” to go public, Wiz has ambitious goals to become “the biggest cybersecurity company in the world,” positioning itself as the market leader in cloud security similar to how Palo Alto Networks dominates firewalls and CrowdStrike leads endpoint protection.
Key Quotes
The adoption of AI is very similar to what happened with the accelerated use of cloud. Part of the reason we’re growing so fast is because we have access to the public cloud, which is growing incredibly fast — and AI only pushes that growth further.
Raaz Herzberg, Wiz’s CMO and VP of Product Strategy, explained how AI adoption is driving the company’s rapid growth by increasing demand for cloud infrastructure and the security services needed to protect it.
We have found that over 80% of its customers are using AI services — which are, in some ways, like cloud services. Companies don’t buy their machines or chips, so they’re using these technologies on the cloud.
Herzberg revealed the extent of AI adoption among Wiz’s customer base, highlighting how AI services running on public clouds create new security requirements that fuel the company’s business model.
We are building a company that I believe can be the biggest cybersecurity company in the world. And I think at this point we are on that path.
Herzberg articulated Wiz’s ambitious vision to become the dominant player in cloud security, positioning the company as the future market leader similar to how Palo Alto Networks and CrowdStrike dominate their respective security domains.
Our Take
Wiz’s trajectory perfectly illustrates how the AI revolution creates ripple effects throughout the technology ecosystem. While much attention focuses on AI model developers and application builders, the infrastructure and security layers are equally critical—and potentially more profitable. The company’s ability to reach $500 million ARR in four years, fueled largely by AI adoption, demonstrates that security concerns are not an afterthought but a primary driver of enterprise spending in the AI era.
The rejection of Google’s $23 billion offer is particularly telling. It suggests that Wiz’s leadership believes the AI-driven cloud security market will grow so substantially that remaining independent could yield far greater returns. This confidence appears well-founded given that 80% of customers are already using AI services, and AI adoption is still in relatively early stages. As AI becomes more deeply embedded in business operations, the security requirements will only intensify, positioning Wiz at the center of a critical and expanding market.
Why This Matters
This story highlights how the AI boom is creating massive opportunities in adjacent technology sectors, particularly cloud security. As companies rush to adopt AI technologies, they’re increasingly relying on public cloud infrastructure, which creates significant security vulnerabilities that need specialized protection. Wiz’s explosive growth—reaching $500 million ARR in just four years—demonstrates the enormous market demand for AI-era security solutions.
The company’s decision to reject Google’s $23 billion offer signals confidence in the long-term value of the cloud security market and suggests that AI-driven growth could make the company worth significantly more as an independent public entity. This reflects a broader trend of AI-adjacent companies choosing independence over acquisition to capture more value.
For businesses adopting AI, this underscores the critical importance of security infrastructure. With over 80% of Wiz’s customers using AI services, it’s clear that AI adoption and cloud security are becoming inseparable concerns. The story also illustrates how the AI revolution is creating opportunities not just for AI developers, but for the entire ecosystem of companies providing essential infrastructure and security services that make AI deployment possible at scale.
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Source: https://www.businessinsider.com/wiz-cloud-security-ai-boom-ipo-google-takeover-2024-12