Cloud data management company VMware has reached an agreement to acquire data privacy management software developer Securiti AI for approximately $1.73 billion. The acquisition aims to attract customers looking to protect and manage cloud data used in artificial intelligence (AI) applications.

The two companies announced on Tuesday, October 21, that the transaction will integrate Securiti AI's Data Command Center product with VMware's backup and recovery software. The Data Command Center is designed to consolidate and protect data scattered across various cloud services.

Amid a surge in cybersecurity incidents, VMware intends to enhance its competitive position against rivals such as Rubrik (ticker RBRK) and Commvault Systems (ticker CVLT) through this acquisition.

Both companies disclosed that the deal is expected to close in the fourth quarter of this year. Following the completion of the transaction, Securiti AI CEO Rehan Jalil will join VMware as the President of Security and AI Business.

Morgan Stanley is providing advisory services for Securiti AI, while JPMorgan is offering financing support for VMware.

The two parties stated that VMware will continue to offer Securiti AI's Data Command Center product, headquartered in San Jose, California, and plans to soon announce the features of the integrated offering.

Last December, VMware's largest shareholder, Insight Partners, a U.S. private equity firm, reported it had sold $2 billion in shares through a secondary transaction, valuing VMware at $15 billion. In 2020, Insight Partners acquired VMware for approximately $5 billion.

VMware's software enables customers to quickly recover data after cybersecurity incidents, such as ransomware attacks, or accidental data loss. Its core products support immutable backups to prevent ransomware from modifying or deleting data—ensuring that clean copies of data are available for recovery even if hackers encrypt the files.