Google has agreed to purchase cybersecurity startup Wiz for $32 billion, marking its most significant acquisition to date as the company faces mounting regulatory scrutiny and the threat of antitrust actions.
Announced Tuesday, the all-cash deal is part of Google's push into cloud computing amid the ongoing artificial intelligence boom. As demand for AI-driven data centers increases, competition has intensified among Google, Microsoft, and Amazon.
If approved by regulators, Wiz will become part of Google Cloud, a division that has gained prominence despite the company’s reliance on search and advertising, which generate most of its $350 billion in annual revenue. The cloud segment has seen rapid growth, with revenue surging from $26.3 billion in 2022 to $43.2 billion in 2023.
Founded in 2020 by four Israeli army veterans, Wiz has grown into a major cybersecurity player with operations headquartered in New York. The company, which specializes in cloud security, is expected to generate $1 billion in revenue this year.
“Wiz and Google Cloud share a vision of making cloud security more accessible, intelligent, and user-friendly,” said Wiz CEO Assaf Rappaport in a blog post.
Google CEO Sundar Pichai emphasized that Wiz’s integration would enhance security while reducing costs. His remarks appeared aimed at regulators likely to scrutinize the deal’s impact on competition and pricing.
Reports suggest Google had been in talks with Wiz for some time, with an earlier $23 billion bid rejected in July 2023. At the time, Wiz was considering an initial public offering but ultimately opted for the Google acquisition amid stock market volatility.
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Analysts at Wedbush Securities described the acquisition as a bold move against Microsoft and Amazon, both of which have made significant investments in cybersecurity to strengthen their cloud services. They noted that Google has lagged in the cloud market but suggested the Wiz deal could shift the competitive landscape.
The $32 billion purchase far surpasses Google’s previous record acquisition—the $12.5 billion Motorola Mobility deal in 2012. It also ranks as the largest cybersecurity acquisition in history and among the 20 costliest software deals ever, according to financial intelligence firm Mergermarket.
While some of Google’s past acquisitions, such as YouTube and DoubleClick, have been highly successful, others, like Motorola, did not meet expectations. The $5.4 billion acquisition of Mandiant in 2022, however, has contributed to Google Cloud’s growing profitability, which reached $6.1 billion last year.
Regulatory Hurdles Loom
The acquisition comes as Google faces intense regulatory scrutiny. The U.S. Justice Department has filed multiple antitrust cases against the company, including one targeting its dominance in digital advertising. Another case concluded that Google unlawfully monopolized internet search, with potential penalties under discussion.
The Wiz deal is expected to face close examination from antitrust regulators, especially amid growing concerns over tech industry consolidation. While the Trump administration has signaled support for corporate mergers, FTC Chairman Andrew Ferguson has expressed skepticism about allowing Big Tech to expand further.
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Last year, antitrust concerns reportedly led Wiz to abandon discussions with Google. However, analysts at Mergermarket suggest that Google and Wiz are now more confident in regulatory approval under the new administration.
Despite this, the watchdog group Demand Progress Education Fund has urged regulators to block the acquisition, warning of further market concentration. “This is a test of whether regulators will stand up to Big Tech,” said Emily Peterson-Cassin, the group’s corporate power director.
If approved, Google and Wiz expect to finalize the deal by 2026, pending regulatory clearance and other conditions outlined in the agreement.
Source: With input from agency