Alphabet said Tuesday that Google parents will buy Wiz for around $32 billion in their biggest deals to double cybersecurity and reduce its edge in the cloud computing race with Amazon and Microsoft.
The blockbuster helps Google with the rapidly growing cybersecurity solutions that companies use to remove significant risks, and tests the Trump administration's desire for major M&A after years of strict regulations scrutiny.
Alphabet's shares fell more than 2%. This year, stocks have fallen 13% this year on concerns over the rise of China's low-cost deepseyk and heavy AI spending on the market-leading high-tech giant pullback over the past two years.
Alphabet is paying heavier prices than Wiz's $23 billion bid last year that Israeli startup rejected. It was valued at $12 billion in the private funding round last May.
Wall Street is hoping to change antitrust policies under President Trump, who was chosen to lead Federal Trade Commission's Andrew Ferguson, and is expected to return to the big M&A regulations that are characteristic of his predecessor, Lina Kahn.
But Trump said he will continue to scrutinize big technology that began during his first term.
Wiz works with cloud providers such as Amazon Web Services, Microsoft's Azure, and Google Cloud to count Morgan Stanley, BMW, and Luxury Powerhouse LVMH among its customers.
“We've seen a lot of effort into making our customers more comfortable,” said Dave Wagner, portfolio manager at APTUS Capital Advisors.
After the deal ended, Wiz joined Google Cloud Business, earning more than $40 billion in revenue in 2024, surpassing the growth of the search business in recent years.
Wiz's products will continue to be available on all other major cloud services. Alphabet expects the transaction to close in 2026 subject to regulatory approval.
Da Davidson analyst Gil Luria said the higher prices are based on Wiz's other annual growth.
“To allow Google to compete with Microsoft Azure for its enterprise customers, it needs to be able to provide a deeper suite of services, including security software,” he said.
Wiz has agreed to a cancellation fee of more than $3.2 billion, sources told Reuters, one of the highest fees in M&A history.
Interest in the cybersecurity industry has risen since last year's global cloud strike halted industry-wide, urging businesses to spend more on protecting their online domains.
Regulatory concerns
Google emphasizes that Wiz will continue to work with competing cloud platforms.
Interoperability has been a major theme in recent antitrust cases, including existing Justice Department cases involving Google's advertising technology.
FTC pursues anti-trust investigations in Microsoft's cloud computing business.
“Google is not a leader in cloud business, generally speaking. Wiz is still available for all other cloud services,” says Elise Phillips, policy advisor to Public Knowlede, a public interest advocacy group.
“All kind of exclusivity agreement between the two people on Line gives me a source of concern.”
Google is already on the regulatory crosshair, and DOJ deals with what the judge said was an illegal search monopoly in sought action, including the sale of a Chrome browser.
“This (trading) is going to be a big test for pro-business advocates,” said Wagner of Aptus Capital.
As of December 31, Google had $23.47 billion in cash and cash equivalent.
The company had set aside its 2025 capital expenditure of $75 billion, but said on Tuesday its capital allocation plans had not changed.
In 2015, the founder of Wiz sold cloud security company Adallom to Microsoft. The latest deal is another indication that Israel's cybersecurity industry is far outweighing its weight.
Several security companies based in Israel or founded by Israeli people have been acquired by Silicon Valley Giants, including Siemplify, which was purchased by Alphabet in 2022, including the original ones that Salesforce acquired in 2024.
