Google Announces $32 Billion Acquisition of Cybersecurity Firm Wiz
SAN FRANCISCO (AP) — Google has unveiled plans to acquire cybersecurity firm Wiz for $32 billion, a move that would be the tech giant’s largest acquisition to date. The proposed deal comes amidst an artificial intelligence boom and increasing regulatory scrutiny around Google’s market dominance.
The announcement marks Google’s continued push into cloud computing, an area experiencing rapid growth fueled by the increasing demand for data centers capable of handling the computational demands of AI technologies. This expansion intensifies competition within the cloud space, where Google, Microsoft, and Amazon are all vying for dominance. If the transaction receives regulatory approval, Wiz will become part of Google Cloud. This division is separate from Google’s search and advertising operations, which generate the bulk of its revenue.
Sundar Pichai, CEO of Google and Alphabet, at the APEC CEO Summit in San Francisco.
Wiz: A Rising Star in Cybersecurity
Wiz, a five-year-old startup, was founded by a group of friends who met in the Israeli army during their teenage years. The company is on track to generate an estimated $1 billion in revenue this year. Wiz’s security tools protect the data stored in data centers. According to Wiz CEO Assaf Rappaport, the company believes that “cloud security needs to be easier, more accessible, more intelligent, and democratized, so more organizations can adopt and use cloud and AI securely.”
During a conference call, Google CEO Sundar Pichai suggested that adding Wiz to the Cloud division would lead to enhanced security at a reduced cost. This assessment may have been intended to address regulatory concerns regarding the deal’s potential impact on competition and pricing. Google had courted Wiz for some time, finally agreeing to a price exceeding a previous $23 billion bid rejected in July. At that time, Wiz had indicated its intention to pursue an initial public offering. However, market volatility has cooled the IPO market. Rappaport stated that becoming part of Google will allow Wiz to “innovate even faster.”
Market Impact and Antitrust Considerations
Wedbush analysts described Google’s move to buy Wiz as a “shot across the bow” at its rivals, particularly Microsoft and Amazon, both of which have already invested heavily in cybersecurity as they compete to dominate cloud computing. The acquisition could shift the competitive landscape, as Google has been playing catch-up in the cloud space.
The $32 billion purchase of Wiz represents the largest cybersecurity acquisition ever and ranks among the top 20 most expensive acquisitions of a software company in history, according to Mergermarket, a financial intelligence service. Investors reacted with some caution to the news, with Alphabet’s shares declining by 2%. Some of Google’s past acquisitions, like the $1.76 billion purchase of YouTube and the $3.1 billion acquisition of DoubleClick, have proven highly valuable.
Doubleclick is now part of an antitrust case filed by the U.S. Justice Department that is targeting Google’s technology for the distribution of ads across the internet. A ruling in that case is expected this year. Regulators in the U.S. and abroad are also monitoring Google on other fronts.
The Wiz deal will also undergo scrutiny from antitrust regulators. While some anticipate the Trump administration to be more open to dealmaking than in previous years, concerns about Big Tech’s growing influence persist, with Andrew Ferguson, the Trump administration’s Federal Trade Commission Chairman, expressing a commitment to regulating large tech companies. Antitrust concerns stem from the potential impact on independent cybersecurity vendors and larger competitors.
According to Wedbush analysts, the industry is perceived as being “ripe for consolidation,” which could result in “massive growth opportunities” as the AI Revolution continues. Antitrust concerns were also cited as a reason Wiz previously paused sales discussions with Google last year, as the Biden administration sought to block tech mergers.
The fact that the deal is moving forward now suggests that both Google and Wiz are optimistic about the deal gaining approval from the U.S. authorities. Mergermarket analysts Kevin Ketcham and Kevin McCaffrey wrote in a Tuesday note that “The two sides likely wouldn’t have struck the deal if they didn’t at least see a potential path to closing.” However, the business watchdog group Demand Progress Education Fund urges the administration to halt the acquisition attempt. If they receive the green light from regulators and meet certain conditions, Google and Wiz expect the deal to finalize in 2026.
