For $32 Billion… Why Did Google Acquire “Wiz”?
Google has announced its agreement to acquire the cloud cybersecurity startup Wiz for $32 billion, making it one of the largest acquisitions in the company’s history, according to Indian Express.
Google, owned by Alphabet, last made a major acquisition when it purchased the cybersecurity firm Mandiant for $5.4 billion.
According to reports, Wiz will be integrated into Google’s cloud computing services division, which does not dominate the market as much as the company’s core search business.
Google’s acquisition of Wiz also revives a previous takeover bid from last year. This time, Google is paying $10 billion more than its initial offer.
In July 2024, Wiz rejected a $23 billion offer from Google due to antitrust concerns and regulatory challenges in the U.S.
At that time, Wiz’s founders decided to maintain their independence and pursue an initial public offering (IPO) instead.
The deal is expected to close by 2026, pending regulatory approvals and standard closing conditions.
The Importance of the Acquisition
This acquisition comes amid intense competition in the cloud services market, fueled by rapid advancements in generative AI.
Major tech companies like Amazon Web Services (AWS) and Microsoft Azure are competing for dominance in hosting large language models (LLMs) and other AI-driven services.
Although Google Cloud Platform holds a 15% market share, it lags behind AWS and Azure in growth. Google aims to enhance its cloud security capabilities with Wiz’s advanced technology to strengthen its position in the market.
Wiz’s Products
In 2015, Wiz’s founders, Assaf Rappaport, Ami Luttwak, and Roy Reznik, sold their first cybersecurity startup, Adallom, to Microsoft for $320 million.
Five years later, they founded Wiz in Tel Aviv, which achieved $100 million in annual recurring revenue just 18 months after its launch.
Wiz provides advanced cloud security solutions, capable of detecting and mitigating cyber threats. The company has built a strong reputation in the cybersecurity sector, and demand for its services is expected to grow as AI-driven cyberattacks increase.
Why Did Google Acquire Wiz?
Google has confirmed that Wiz’s multi-cloud strategy will remain unchanged after the acquisition. This means Wiz’s security products will continue to be compatible with AWS, Azure, and Oracle Cloud.
This acquisition reinforces Google’s position as a leading multi-cloud provider and strengthens its cybersecurity capabilities, a critical factor as AI adoption continues to rise.
However, some analysts warn that the acquisition could threaten Wiz’s neutrality, potentially affecting customer trust, as many businesses rely on vendor-independent security solutions.
Other Deal Details
Google has stated that the acquisition aims to enhance cloud security in the era of generative AI, emphasizing that this shift makes cybersecurity more critical than ever.
Wiz CEO and co-founder Assaf Rappaport described the deal as “strapping a rocket to our backs,” suggesting that it will accelerate innovation at Wiz far beyond what would have been possible independently.
However, the $3 billion+ termination fee has raised eyebrows, as it is one of the highest breakup fees in merger and acquisition history.
Antitrust Concerns
Last year, Google failed to complete the Wiz acquisition due to antitrust concerns.
Google has previously lost a lawsuit against the U.S. Department of Justice for competition law violations, raising questions about whether this new deal will withstand regulatory scrutiny.
