Google Parent Alphabet to Buy Wiz for $32B in Cloud Security Push

Alphabet, the parent company of Google, announced on Tuesday that it will acquire the cybersecurity startup Wiz for approximately $32 billion, marking its largest acquisition to date.

This strategic move highlights Google's commitment to bolstering its cloud business and enhancing its cybersecurity solutions, crucial for competing with Amazon Web Services (AWS) and Microsoft Azure in the rapidly growing cloud industry.

The all-cash acquisition will see Wiz join Google's cloud unit, a division that generated over $40 billion in revenue in 2024, Reuters said.

This will significantly strengthen Google's position in cloud security, particularly in the face of rising demand for AI-powered cybersecurity solutions in industries worldwide.

Wiz, which was valued at $12 billion in a private funding round last May, is one of the fastest-growing cybersecurity companies. It has more than $500 million in annual recurring revenue as of mid-2024.

Google's decision to increase its offer from $23 billion last year to $32 billion reflects Wiz's ongoing growth and its importance to Google's cloud strategy. The acquisition price also suggests Alphabet is confident that the deal will pass regulatory scrutiny, including potential antitrust concerns.

Despite the hefty price, Alphabet has agreed to a termination fee of more than $3.2 billion, one of the highest in merger and acquisition history. This could signal the company's commitment to finalizing the deal, which is expected to close in 2026, pending regulatory approvals.

Wiz to Remain Available on AWS, Azure, and Google Cloud Post-Google Deal

Wiz's cybersecurity products, which are used by major clients such as Morgan Stanley, BMW, and LVMH, will remain available across multiple cloud platforms, including AWS, Microsoft's Azure, and Google Cloud.

This decision is aimed at alleviating concerns that the acquisition could limit Wiz's services to only Google Cloud customers.

Elise Phillips, policy counsel at Public Knowledge, voiced her concerns, emphasizing the importance of maintaining interoperability across cloud services, especially in light of ongoing antitrust investigations into Big Tech.

According to Rappler, the acquisition of Wiz comes at a time when businesses are increasingly prioritizing cybersecurity due to the rise in cyberattacks and the growing reliance on generative AI technologies like ChatGPT.

As Wiz's CEO Assaf Rappaport stated, "Cloud is more important than ever, and attackers are not slowing down. They are already using the most innovative technologies to move faster."

Google's move to acquire Wiz is seen as a crucial step to compete with Microsoft Azure, which already offers a broad suite of services, including advanced security solutions. Analyst Gil Luria from D.A. Davidson noted that for Google to capture more enterprise customers, it needs to enhance its security offerings.

As Alphabet continues to invest heavily in AI and cybersecurity, it faces challenges from competitors, particularly China's lower-cost cloud providers.

Despite this, analysts remain optimistic that the shift in antitrust policies under President Donald Trump could help reignite deal-making momentum in Big Tech.

Google's commitment to its capital expenditure plans, including the $75 billion set aside for AI investments in 2025, further indicates its strategy to remain competitive in the fast-evolving tech landscape.

With regulatory approvals still pending, this monumental deal will be one to watch in the coming years.

Originally published on vcpost.com