Google’s parent company, Alphabet, has agreed to acquire cloud security firm Wiz for $32 billion in cash, marking the company’s largest acquisition to date. The deal, announced on Tuesday, will see Wiz join Google Cloud once regulatory approvals are secured. The transaction is expected to be completed next year.
The acquisition follows a failed attempt by Google to buy Wiz for $23 billion last year. At the time, Wiz opted to remain independent, citing regulatory concerns and a potential initial public offering. Alphabet’s shares fell nearly 3% on Tuesday after the latest acquisition was confirmed.
Google described the takeover as a strategic move to strengthen its cloud security capabilities, particularly as artificial intelligence continues to transform the technology landscape. Alphabet CEO Sundar Pichai, speaking during a call with investors, said, “AI brings new risks, but also new opportunities. Organizations are looking for cybersecurity solutions that improve cloud security and span multiple clouds.”
Founded in 2020 by Israeli-born Assaf Rappaport and his team, Wiz has gained prominence in the cloud security sector. The company provides real-time scanning and threat detection for cloud environments, serving major technology firms, including Amazon Web Services and Microsoft Azure. After the deal closes, Wiz will continue offering its services to other cloud providers, following a similar model to Google’s previous acquisition of cybersecurity firm Mandiant.
The acquisition comes at a time when analysts predict a wave of mergers and acquisitions in the tech sector, particularly in cybersecurity. Wedbush analyst Dan Ives noted that the deal could encourage more consolidation in the industry, especially after the departure of Lina Khan, the former head of the U.S. Federal Trade Commission, who was known for her scrutiny of big tech mergers. “While the merger & acquisition environment has been extremely quiet to start the year, we believe that this acquisition will open the door to a massive wave of M&A across the tech landscape,” Ives said.
Google’s cloud business has seen significant growth, generating more than $43 billion in revenue in 2024, a 31% increase from the previous year. By acquiring Wiz, Google aims to strengthen its position against Microsoft, which has also been expanding its cloud security services. Wiz’s threat prevention and detection tools are expected to enhance Google’s security offerings as competition in the cloud computing market intensifies.
Despite the strategic importance of the deal, Alphabet’s stock was down 3.8% in morning trading on Tuesday.