Google to acquire cybersecurity firm Wiz in $32 billion deal

Google has agreed to buy cybersecurity company Wiz for $32 billion, making it the organisation’s largest acquisition to date.

The deal, which is expected to happen in 2026 pending regulatory approval, would integrate Wiz into Google Cloud, strengthening its security capabilities in cloud computing and AI.

Expanding Google’s cloud security strategy

The acquisition follows Google’s broader push to expand its cloud business, which generated $43.2 billion in revenue in 2023, a 64% rise from the previous year. Wiz, which is well-known for its cloud security expertise, is likely to help Google enhance its ability to protect AI-driven cloud infrastructure.

Wiz CEO Assaf Rappaport said the company shares Google’s goal of making cloud security more accessible and effective. “Wiz and Google Cloud are both fueled by the belief that cloud security needs to be easier, more accessible, more intelligent, and democratised, so more organisations can adopt and use cloud and AI securely,” Rappaport said in a blog post.

Google CEO Sundar Pichai said the deal would enable Google to offer better security at lower costs, which could appeal to regulators concerned about market competition.

Competitive landscape and market position

The $32 billion deal surpasses Google’s previous largest acquisition—the $12.5 billion purchase of Motorola Mobility in 2012. It also makes Wiz the most expensive cybersecurity acquisition and one of the top 20 software deals in history.

Google’s cloud business remains behind Microsoft and Amazon in market share. Microsoft’s Azure and Amazon Web Services (AWS) have long dominated the sector, particularly in AI-driven solutions. Wedbush analysts called the acquisition “a shot across the bow” at Microsoft and Amazon, suggesting that Google’s focus on improving cloud security could help it close the gap with its rivals.

The deal also comes amid increasing demand for AI-driven cloud services. AI requires enormous computing power and secure infrastructure, resulting in rivalry among cloud providers to improve their security capabilities. Microsoft’s acquisition of RiskIQ and Amazon’s acquisition of CloudEndure reflect similar strategic moves to improve cloud security.

Regulatory scrutiny and legal challenges

The acquisition is likely to be closely scrutinised by US regulators. The Department of Justice (DOJ) has already filed an antitrust case against Google, accusing it of monopolistic practices in online search and digital advertising. Last year, a federal judge determined last year that Google maintained a monopoly on search by paying to be the default search engine on devices and browsers.

The DOJ’s proposed penalties include forcing Google to divest its Chrome browser and stop paying companies like Apple to set Google as the default search engine. A separate antitrust case, known as the DoubleClick trial, focuses on Google’s dominance in digital advertising.

Given the DOJ’s ongoing investigations, the Wiz deal will likely face questions about its impact on competition in the cybersecurity market. Analysts from Mergermarket noted that Google and Wiz might feel more confident about regulatory approval under the Trump administration, which has signalled a more pro-business stance. However, Andrew Ferguson, chairman of the Federal Trade Commission (FTC), has been vocal about limiting Big Tech’s market power, adding uncertainty to the approval process.

Strategic implications and market reaction

Wiz’s decision to accept Google’s offer follows a reported $23 billion bid last year, which the company rejected in favour of pursuing an initial public offering (IPO). Market volatility and the current business environment likely influenced Wiz’s decision to opt for a strategic sale instead of going public.

The deal reflects broader trends in the cybersecurity sector, where rising demand for AI and cloud security is driving consolidation. Analysts believe the acquisition might give Google a competitive advantage in securing AI infrastructure and protecting sensitive data, particularly as the AI industry faces growing security threats.

Despite the deal’s strategic value, market reaction was lukewarm. Following the announcement, Alphabet’s stock fell by 2%, suggesting investor fears about regulatory difficulties and the high acquisition cost.

(Photo by Unsplash)

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