Google Acquires Wiz for $32 Billion in Cybersecurity Push
Google’s parent company, Alphabet, is set to acquire the cybersecurity startup Wiz for around $32 billion, marking its largest acquisition to date. This strategic move is designed to bolster Google’s cloud computing unit and enhance its competitive edge in the cloud market against industry leaders such as Amazon and Microsoft.
The deal will integrate Wiz into Google’s cloud unit, reinforcing its capacity to provide comprehensive cybersecurity solutions. This is a move that directly addresses the increasing demand for robust security measures by businesses to mitigate critical risks. The acquisition’s substantial price tag, alongside a notable breakup fee, indicates Alphabet’s confidence in navigating potential regulatory scrutiny, especially given the current political climate with increased focus on major tech mergers.
Prior to the announcement, Alphabet’s shares experienced a dip. While the stock had already been down this year due to concerns over escalating AI spending and the intensified competition from lower-cost rivals, this acquisition is seen as a decisive action.
The acquisition price represents a considerable increase from a previous $23 billion offer last year, which Wiz declined. Sources familiar with the deal indicate that Google Cloud CEO Thomas Kurian maintained consistent communication with Wiz, even after the initial rejection. The talks intensified recently, possibly spurred by changes in the political landscape regarding tech company regulations.
Wiz, which collaborates with cloud providers like Amazon Web Services, Microsoft’s Azure, and Google Cloud, currently serves clients like Morgan Stanley and BMW. Despite the acquisition, Wiz’s products are expected to remain compatible across other major cloud services. The deal is projected to be finalized in 2026, pending regulatory approvals.
“There will likely be a microscope on the deal by investors, given Google’s lackluster historical track record with its capital allocation plan, specifically around M&A,” said Dave Wagner, portfolio manager at Aptus Capital Advisors.
Google’s cloud unit generated over $40 billion in revenue in 2024, surpassing its search business growth. D.A. Davidson analyst Gil Luria believes the substantial valuation reflects Wiz’s continued exponential growth in cloud services. Luria noted that Google requires a broader suite of services, including security software to effectively compete with Microsoft Azure for enterprise clients.
The substantial $3.2 billion termination fee underscores the significance of the deal. The cybersecurity industry has experienced increased interest due to recent high-profile security breaches, resulting in greater corporate investment in online security measures. The deal is another indication of the strength of the Israeli cybersecurity sector.
Concerns about regulatory scrutiny have led Google to emphasize that Wiz would continue working with competing cloud platforms. Interoperability is a key theme in current antitrust matters, including the investigation into Google’s ad technology by the U.S. Department of Justice. Elise Phillips, policy counsel at Public Knowledge, stated that any exclusive agreement between Google and Wiz could provoke concern. The Department of Justice is also pursuing measures over what a judge called an illegal search monopoly.
“This (deal) will be a big test for pro-business advocates,” said Aptus Capital’s Wagner.
With approximately $23.47 billion in cash and cash equivalents as of December 31, Google may need to secure financing to complete the acquisition.
