Mag 7 sell-off, Wiz rejects Google, UBI, Kamala in, China's nuclear buildout, Sacks responds to PG

After opening jokes about predicting the Biden-to-Harris swap, Jason says he moved his family to Austin this year, to a horse ranch, while still spending time in the Valley, New York and Miami. He plans to keep joining the weekly poker game and promises a Science Corner later.

Jason reports that Wiz declined Google's $23 billion offer, against a $12 billion valuation in its last round and about $500 million in ARR. That is roughly 50 times current revenue and 23 times projected $1 billion ARR, while high-growth SaaS companies trade near 10 times forward revenue. He offers two explanations: Wiz expects to grow into a higher value, or fears regulators would block the deal.

Chamath suspects the AT&T Snowflake leak raised demand for cloud security, noting hyperscalers are fragile if services are unreliable and that Wiz went from zero to half a billion dollars in four or five years. Sacks thinks Wiz wants to stay standalone and may doubt approval. He says the long-term median software multiple is around 7, so if Wiz projects $1 billion ARR next year after 100% growth, the offer may not be crazy.

Jason notes Google Cloud did almost $20 billion in the first half, a $40 billion run rate against $33 billion last year and $4 billion in 2017. Friedberg adds that last quarter's revenue was $10.3 billion, up from $8 billion, with a $1.2 billion operating profit. Alphabet generates about $60 billion of annual free cash flow and holds over $100 billion in cash.

Friedberg says Google wants deals big enough to matter that can pass antitrust review, and cloud security fits as a cross-sell. He cites Peter Thiel's point that either the buyer overpays or the seller sells too early, and argues Wiz could approach Palo Alto Networks' roughly $100 billion value. Its downside is an IPO next year at perhaps $15 billion to $20 billion. Jason's counterpoint is that Google could bundle a rival product free.

CrowdStrike's sensor configuration update bricked about 8.5 million Windows machines, which needed hard resets by IT. It was not a cyber attack. Delta canceled over 6,000 flights, the Department of Transportation is investigating, and shares fell 25%, about $24 billion of market value.