Jamie Spencer
Alphabet (GOOGL.O) announced on Tuesday that it will acquire cybersecurity startup Wiz for $32 billion, marking its largest acquisition to date. The deal is expected to bolster Google Cloud’s security solutions and enhance its competition with Amazon Web Services (AWS) and Microsoft Azure.
The acquisition signals Alphabet’s commitment to cybersecurity as enterprise cloud security spending rises. Wiz’s products will continue to be available across multiple cloud platforms, including AWS and Azure.
Why Google is Paying a Premium
Alphabet’s previous bid for Wiz at $23 billion was rejected last year. The startup, valued at $12 billion in a 2024 funding round, had more than $500 million in annual recurring revenue.
The negotiations accelerated after President Donald Trump returned to office, sources said. The administration has increased scrutiny on Big Tech mergers, but analysts expect a shift in antitrust policies under FTC Chairman Andrew Ferguson.
Regulatory Challenges Ahead
The acquisition is expected to close in 2026, subject to regulatory approval. Alphabet emphasized that Wiz will continue working with competing cloud platforms, likely to preempt antitrust concerns.
“Google is not a leader in the cloud business, and Wiz will still be available on all other cloud services,” said Elise Phillips, policy counsel at Public Knowledge.
Despite this, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) continue to scrutinize Big Tech’s market dominance, including Microsoft’s cloud business and Google’s advertising monopoly case.
Market Reaction and Strategic Importance
Alphabet’s stock fell nearly 3% following the announcement. Investors remain wary of Google’s history of capital allocation in acquisitions.
“There will likely be a microscope on the deal by investors, given Google’s lackluster track record with M&A,” said Dave Wagner, portfolio manager at Aptus Capital Advisors.
Still, industry experts see the deal as a necessary move for Google to stay competitive. D.A. Davidson analyst Gil Luria noted that Wiz’s continued exponential growth made it an attractive target.
Why Wiz Matters in Cybersecurity
The cybersecurity industry has gained increased attention following last year’s CrowdStrike outage, which disrupted businesses worldwide. Companies have ramped up spending on security, making Wiz an appealing acquisition.
Several Israeli-founded security firms have been acquired by Silicon Valley giants in recent years:
- Siemplify: Acquired by Google in 2022
- Own: Purchased by Salesforce in 2024
- Adallom: Previously sold to Microsoft in 2015
Wiz’s termination fee of $3.2 billion is among the highest in M&A history, reflecting Alphabet’s confidence in closing the deal.
What’s Next for Alphabet?
Google’s cloud business generated over $40 billion in revenue in 2024, growing faster than its search business. However, it still lags behind AWS and Azure.
“For Google to compete with Microsoft Azure for enterprise customers, it needs a deeper suite of services, including security software,” said Gil Luria.
Alphabet had $23.47 billion in cash as of December 31, implying it may seek financing to complete the transaction.
