Alphabet to Buy Wiz for $32 Billion to Improve Cloud Security

On March 18, 2025, Alphabet, the parent company of Google, announced a $32 billion acquisition of the fast-growing cybersecurity start-up Wiz. This landmark deal, the largest in Alphabet’s history, signals an aggressive push to bolster its cloud-computing capabilities in a fiercely competitive race against Amazon and Microsoft. By folding Wiz into its Google Cloud division, Alphabet aims to sharpen its edge in delivering cybersecurity solutions that shield businesses from escalating digital threats.

The deal’s eye-watering price tag comes with a hefty $3.2 billion breakup fee, one of the steepest in merger and acquisition history, reflecting Alphabet’s confidence that it can navigate regulatory scrutiny under a Trump administration known for its hawkish stance on Big Tech. Despite this optimism, Alphabet’s shares slid nearly 3% on the news. The stock had already shed 13% in 2025, battered by concerns over its hefty AI investments and a broader retreat from tech giants amid competition from China’s cost-effective DeepSeek.

Wiz, an Israeli-born start-up, rejected a $23 billion offer from Alphabet just last year. Since then, its valuation has soared. A private funding round in May 2024 pegged its worth at $12 billion, backed by over $500 million in annual recurring revenue by mid-year. Google Cloud CEO Thomas Kurian never wavered in his pursuit, maintaining dialogue with Wiz even after the initial rebuff. Talks gained momentum in recent months, spurred by Donald Trump’s return to the White House, according to sources close to the matter who spoke on condition of anonymity.

Trump has vowed to keep Big Tech under a microscope, a policy rooted in his first term. Yet, Wall Street anticipates a softer touch on mergers under his appointee to lead the Federal Trade Commission, Andrew Ferguson. Could this deal mark a turning point in how regulators view tech giants’ expansion?

Wiz already powers cybersecurity for heavyweights like Morgan Stanley, BMW, and LVMH, working seamlessly across Amazon Web Services, Microsoft Azure, and Google Cloud. Alphabet has pledged to keep Wiz’s offerings available on rival platforms—a strategic nod to interoperability that might ease antitrust worries. The acquisition, slated to close in 2026 pending regulatory approval, arrives at a pivotal moment. Google’s cloud unit raked in over $40 billion in 2024, outpacing growth in its iconic search business and cementing its status as a key revenue driver.

Dave Wagner, portfolio manager at Aptus Capital Advisors, cautions that investors will dissect this move closely. “There will likely be a microscope on the deal by investors, given Google’s lacklustre historical track record with its capital allocation plan, specifically around M&A,” he said. Past missteps in acquisitions loom large—can Alphabet prove this time is different?

Analyst Gil Luria of D.A. Davidson sees the steep price as justified. “For Google to be able to compete with Microsoft Azure for enterprise customers, it needs to be able to offer a deeper suite of services, including security software,” he explained. Wiz’s exponential growth over the past year underpins the premium Alphabet is willing to pay. The start-up’s rise mirrors a broader surge in cybersecurity demand, fuelled by incidents like the 2024 CrowdStrike outage that disrupted operations worldwide. Businesses are now racing to fortify their digital defences—Wiz stands ready to meet that need.

Israel’s outsized role in this space shines through once again. Wiz’s founders, who sold their earlier venture Adallom to Microsoft in 2015, join a lineage of Israeli innovators snapped up by Silicon Valley titans. Alphabet itself acquired Siemplify in 2022, while Salesforce scooped up Own in 2024. What is it about this small nation that breeds such formidable security talent?

Regulatory waters remain choppy. Google stresses Wiz’s continued compatibility with competitors, a move that Elise Phillips, policy counsel at Public Knowledge, views as prudent. “Generally speaking, Google is not a leader in the cloud business, and Wiz will still be available on all other cloud services,” she said. “Any type of exclusivity agreement between the two of them down the line would give me cause for concern.” The U.S. Department of Justice, already pressing Google to divest its Chrome browser over an illegal search monopoly, looms as a potential hurdle. The FTC’s probe into Microsoft’s cloud dominance adds further complexity. Will this deal withstand the glare of Washington?

Wagner calls it a litmus test. “This (deal) will be a big test for pro-business advocates,” he said. With $23.47 billion in cash reserves as of December 31, 2024, Alphabet may need to tap financing to seal the purchase—a rare move for a company accustomed to wielding its war chest. The stakes are high, the spotlight intense.