Revisiting the Google / Wiz Deal

So the Wiz deal is off. Why did we hear so much about it, only for it to immediately fall apart? And why did it immediately fall apart, when we heard so much about it?

My guess is because Biden stepped down. Before Biden stepped down, things were looking rosy for the acquisition to go through. Major Wiz Series E investors A16Z just came out supporting Trump, who has promised much laxer antitrust regulation than Biden allowed. Not only that, Trump put Peter Thiel's favorite couch-fucker JD Vance [1] in the Vice President spot, virtually ensuring this one goes through. Plus if you accept an acquisition offer and it falls through, that can be disastrous to the morale of a company—better not to take it.

Another possible reason is that once you're in the acquisition spotlight, things aren't that rosy. The first big stories to come out are fawning—in this case look at these four young billionaires who met on their first day in the murder factory [2] and are now building a fast growing and successful company.

Then people start to dig. But what do you find when you dig?

Bribes

Apparently bribes. Yes, bribes! It turns out that early Wiz investor and current Wiz board member Gili Raanan, head of Israeli VC Cyberstarts, has been accused of paying bribes to major CISOs for buying software from their portfolio companies like Wiz. The bribes came in the form of "points on the fund"—that is, if the companies succeed, these CISOs will make a lot of money.

Company officer taking a bribe? Sounds like a breach of fiduciary duties! If your company uses Wiz, and the purchase was championed by the CISO, you might want to start an investigation before the press does.

Let's talk about narrative

Since the acquisition fell apart so quickly, we should be asking questions about why it was front page news across the world. As you’re probably aware, these giant press pushes are organized, and when there’s as big an effort as this one to sell you a story, there’s something fishy behind it. Why were they trying to sell a Wiz acquisition so hard? There are three main reasons:

• Israel's economy is in the shitter: There is zero tourism (war zones aren’t top vacay destinations, who knew), 46,000 businesses have closed, the GDP has shrunk by 20%, half a million Israelis have fled, and its biggest port just declared bankruptcy (thanks Houthis!). They want you to believe that this Google-Wiz deal somehow means things are getting better (surprise: they aren't).
• Israel's tech sector is in the shitter: Tech investments are down 56% this past year, there have been mass layoffs, and the engineers are out of the office (hint: they’re in Gaza). No one invests in a war zone, especially when the engineers who are supposed to be building your product are busy shooting Palestinian children in the head. Investing in Israeli tech at this point constitutes fiduciary negligence, but they’re desperate to convince you otherwise. If only they could convince Google to take a punt, maybe others would too.
• Google's cloud product is in the shitter: Imagine how bad Google Cloud must be for Thomas Kurian to fly over to Genocide Gulch to ask the war crime boys if he can pay double for their company. Yes, that’s how badly Google Cloud has fucked things up.

The purpose of all this press was to sell you the idea that everything is ok. If this one deal had gone through, Israel and Google would both have been magically fixed! Don’t worry about Google losing the Cloud business, about Israel’s ongoing genocide of Palestinians, its multifront war [3], pending ICC arrest warrants for its leaders, and the ICJ’s ruling that it must abandon its 75 years of colonization and remove all settlers from the West Bank. No, just look over here!

Israel's economy is in the shitter

Approximately 46,000 Israeli businesses have closed since October 7, 2023 and projected that number could reach 60,000 by the end of 2024. Israel’s GDP has shrunk by 20%. Nearly half a million Israelis have fled the country, partially because Israel is definitively losing at least three wars that it started (Palestine, Hezbollah, and the Houthis) while also trying to start a full-fledged war with Iran via its assassination of Ismail Haniyeh. In the last skirmish with Iran, its Iron Dome (or what's left of it, anyway) had to be rescued by a $1 billion U.S. operation.

This acquisition deal was billed as a massive rebuke to the "trendy" BDS movement. As if a giant corporation—one that is already heavily involved in the genocide—buying a B2B SaaS company would somehow change the fact that everyone is refusing to buy Israeli strawberries or hummus, let alone visit the entire country of Israel. 

People are boycotting Israel because it's committing ethnic cleansing and genocide. It commits new massacres and war crimes daily and has already destroyed all of Gaza's infrastructure and killed some 186,000 Palestinians.

Boycotts are affecting a vast cross-section of Israel: tourism, film, art, and TV, tech (of course, see below), academia, real estate, and agriculture. It's a catastrophic time for both local and foreign investment. It turns out investing in Israel in the midst of a genocide does not sit well with the global majority.

Tax Take

Israel was also trying to spin this as a big win for Israel’s coffers. The Wiz acquisition would have brought a fortune to the Israel tax authorities! After all, the founders live in Israel, and Haaretz estimates about $3 billion would have been paid in taxes.

Obviously, that Google would even consider putting $3 billion into Israel’s coffers during a literal genocide is enough reason to be outraged.

But would it have significantly helped the Israeli economy? Israel spent $114 billion in 2023. The $3 billion tax take that would have saved everything represents less than 2% of the country’s spending. A nice chunk of change, but nothing that would have made a difference.

No, instead we should consider this all nothing more than spin, partially for the audience at home and mostly for the worldwide audience to consider reinvesting in Israel despite its genocide in Gaza.

Israel's Tech Sector is in the shitter

Back in January, Haaretz declared that the Israeli high-tech industry was at its lowest point ever.

It's now official: Israeli high-tech industry is in its worst downturn ever – worse than the blowout following the dot.com bubble of the early 2000s and much worse than the fallout from the Great Recession of 2009. And, the worst may be yet to come.

Spoiler alert: the worst is happening right now.

Investment in the Israeli tech sector is down 56% this year. Not that it was doing great last year—the tech industry contracted globally, and investment in Israel in 2023 was down 74% from 2021.

Israeli startups are being advised to register in the US instead of Israel to avoid both the stigma and the financial hardship of being Israeli. Investors don't invest in war zones—it's criminally irresponsible: instability, security costs, insurance challenges, market uncertainty! And don’t forget, of course, the fact that most tech employees are reservists who get sent to shoot kids in Gaza.

Google isn't the only tech giant that has tried to throw Israel's tech sector a lifeline. Intel tried to invest $25 billion in Israel in December and then had to pull out amidst outrage focused in equal parts on its financial irresponsibility and on its moral lapse.

What about Wiz?

Ah yes, the great Israeli company Wiz, registered in NYC, headquartered in NYC, and fully remote. It turns out that only 150 of its 900 employees are even based in Israel. That’s 17%.

Wiz's founders have revealed that its success is due to it being a remote-first company, which allowed it to grow quickly during an uncertain pandemic. But all that growth would have been impossible if Wiz actually was based in Israel. Instead of only 17% of its workers eligible to be sent to Gaza, the entire company could have been called up to kill Palestinians, rendering its product development as dead as Israeli ports.

In fact, it's worth asking why Israel's most valuable startup ever is a remote-first, US-based company. What does it say about the so-called start-up nation’s tech ecosystem when the founders are Israeli and live in Israel, but Wiz still isn't an Israeli company?

Google Cloud is in the shitter

Imagine how inept you have to be to invent cloud computing and still be a distant third in the market, losing to a bad bookshop [4] and the folks who brought you Windows Phone [5].

Google holds just 10% of the cloud market—Google Cloud is laughably behind, and everyone in the industry knows it.

Imagine the desperation coming from this situation. It's been four years since the company brought in Thomas Kurian after unceremoniously showing Diane Greene the door. In that time, he has managed to move from losing billions a year to scraping by a tiny profit in 2023. But he hasn't managed to make any progress on market share.

This is despite Google’s extremely controversial—evil really—contract with Israel as part of Project Nimbus. Google built and runs the actual data centers that power Israel's genocide in Gaza. Google Cloud powers the horrific AI systems known as The Gospel, Lavender, and Where's Daddy, which Israel uses to kill tens of thousands of civilians in Gaza.

Google Cloud's desperation comes from the fact that no matter what they do, they can't convince developers and enterprises to use Google Cloud. Their reputation for shutting down products—Google Reader of course, but last year it shockingly shut down Google Domains, and just last month Google URL Shortener, to name a few—has created a massive stigma they just can’t seem to overcome.

Back in 2019, Google set an alarming deadline: Google Cloud needed to surpass either Microsoft or Amazon in market share by 2023, a task at which Kurian and Google Cloud have dramatically failed. The threat at that time was that Google Cloud would be abandoned, something that weighs on the minds of Cloud customers today, especially given Google’s track record.

This acquisition was Google’s Hail Mary, presumably so Kurian wouldn’t be out on his ass with Google shutting down the whole damn cloud. And despite how massive this acquisition would have been for Google Cloud, every article on it managed to lead not with Google’s prowess in acquisitions or product, but instead about with how Wiz's four founders met in Unit 8200, the "Israeli NSA" behind the genocidal Lavender (which, again, runs on Google Cloud).

This Hail Mary is also why Google offered an absurd premium for Wiz, a company with just $350 million in annual revenue which was (over)valued at $11B just two months ago. And yet, they got turned down. They couldn’t even manage to pay four 39-year-olds $3 billion each to join Google Cloud.

Google, like Israel's economy, political structure, and war machine, is getting desperate. That Google was at the heart of this shiny narrative only to be embarrassed days later reminds me of Biden for the last 10 months. But Israel can only really produce smoke and mirrors, and the truth is that there is no simple fix. Nothing will cover the fact that Israel and its accomplices have killed 186,000 people in 10 months.

[1] A first draft of this post referred to Vance as “Peter Thiel’s blood boy”, but couch-fucker is a more up-to-date reference, and possibly more accurate.

[2] If you’re wondering why every social media network seems to be Zionist, look up “Unit 8200”, that shit is wild.

[3] In the last month alone, Israel has bombed Iran, Syria, Lebanon, Yemen and Gaza, while the US has bombed Iraq on behalf of Israel.

[4] I've been informed that GenZ might not be aware that Amazon was originally an online bookstore.

[5] Microsoft. Yes, it was as bad as you're thinking.