Alphabet announced its intention to acquire the rapidly growing startup Wiz for approximately $32 billion (around Rs. 2,76,784 crore) on Tuesday, marking the company’s largest acquisition to date. This move comes as the Google parent company intensifies its focus on cybersecurity solutions to enhance its competitive stance in the cloud computing sector against giants such as Amazon and Microsoft.
The acquisition is expected to integrate Wiz into Google’s cloud division, thereby bolstering its cybersecurity offerings that assist businesses in mitigating significant risks.
The substantial valuation and atypically large breakup fee indicate Alphabet’s confidence that the transaction will be approved by the White House, despite increased scrutiny from the Trump administration regarding major mergers and acquisitions within the tech industry.
Following the announcement, Alphabet’s shares fell nearly three percent. Prior to this news, the stock had already decreased by 13 percent this year due to concerns over extensive investments in artificial intelligence amidst competition from China’s lower-cost firm, DeepSeek, and a general decline in tech stocks that had previously led the market.
To finalize the deal, Alphabet had to offer a higher price than its initial $23 billion (about Rs. 1,98,935 crore) bid last year for Wiz, which the Israeli startup had turned down.
Wiz was valued at $12 billion (approximately Rs. 1,03,792 crore) during a private funding round last May and had reported over $500 million (around Rs. 4,324 crore) in annual recurring revenue by mid-2024.
Even after Wiz declined last year’s offer, discussions continued between the two companies, driven by the persistence of Google Cloud CEO Thomas Kurian.
In recent months, conversations have accelerated, especially after Trump’s return to the White House. Sources, who requested anonymity, noted that the shift in the political landscape has influenced discussions about antitrust practices in the tech sector.
Trump has indicated a continuation of rigorous oversight of Big Tech, though market analysts predict a potential shift in antitrust enforcement under his administration, particularly with Andrew Ferguson leading the Federal Trade Commission.
Wiz collaborates with various cloud providers, including Amazon Web Services and Microsoft Azure, along with Google Cloud, and counts companies such as Morgan Stanley, BMW, and LVMH among its clientele.
Following the acquisition, Wiz’s products are expected to remain available across other major cloud platforms. Alphabet projects the deal will finalize in 2026, subject to regulatory approvals.
“Investors will likely scrutinize the deal closely, given Google’s historical challenges with capital allocation and mergers and acquisitions,” remarked Dave Wagner, portfolio manager at Aptus Capital Advisors.
In the past year, Google’s cloud unit has generated over $40 billion (about Rs. 3,46,023 crore) in revenue, outpacing growth in its search business.
Gil Luria, an analyst at DA Davidson, highlighted that the elevated price reflects another year of rapid growth for Wiz.
“For Google to effectively compete with Microsoft Azure for enterprise clients, it must provide a broad range of services, including security solutions,” Luria stated.
Reportedly, Wiz has accepted a termination fee exceeding $3.2 billion (roughly Rs. 27,681 crore), one of the highest fees recorded in merger and acquisition history.
The interest in the cybersecurity sector has surged following last year’s global CrowdStrike outage, which affected numerous industries and led companies to increase their investments in cybersecurity measures.
This latest deal showcases Israel’s significance in the cybersecurity landscape, as several Israeli-founded companies have been acquired by major Silicon Valley firms, like Siemplify—purchased by Alphabet in 2022—and Own, acquired by Salesforce in 2024.
The founders of Wiz previously sold the cloud security company Adallom to Microsoft in 2015.
Regulatory Concerns
Google has emphasized that Wiz will continue to work with rival cloud platforms, potentially addressing regulatory apprehensions.
Interoperability has emerged as a key theme in recent antitrust discussions, reflecting the U.S. Department of Justice’s ongoing case regarding Google’s advertising technology, with the FTC currently investigating Microsoft’s cloud services.
“On a general level, Google is not a leader in the cloud space, and Wiz’s services will remain accessible across various cloud environments,” commented Elise Phillips, policy counsel at the advocacy group Public Knowledge.
“Any sort of exclusivity agreement between them in the future would raise significant concerns for me.”
The DOJ is advocating for measures that could include divesting Google’s Chrome browser, addressing a ruling that identified an illegal monopoly in search.
“This acquisition will serve as a pivotal test for pro-business advocates,” concluded Aptus Capital’s Wagner.
As of December 31, Google held $23.47 billion (approximately Rs. 2,03,040 crore) in cash and cash equivalents, indicating it may need additional financing for this substantial deal.
© Thomson Reuters 2025
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
