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Alphabet reportedly nears $30B acquisition of Israeli cloud security firm Wiz

Alphabet reportedly nears $30B acquisition of Israeli cloud security firm Wiz

  • 17.03.2025 23:07
  • siliconangle.com
  • Keywords: dangerous, dangerous

Alphabet Inc., Google’s parent company, is reportedly nearing a $30 billion acquisition of Israeli cloud security firm Wiz. The deal comes after a previous $23 billion offer fell through last year due to regulatory concerns. Wiz, founded in 2020, specializes in detecting vulnerabilities in cloud systems and has raised significant funding, including a recent $1 billion round on a $12 billion valuation.

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Estimated market influence

Alphabet Inc.

Alphabet Inc.

Negativesentiment_dissatisfied
Analyst rating: Buy

Alphabet is considering a $30B acquisition of Wiz, which could impact its financials and market position.

Wiz Inc.

Positivesentiment_satisfied
Analyst rating: N/A

Wiz's valuation increased from $23B to $30B due to Alphabet's higher offer, enhancing their market position.

Context

Analysis of Alphabet's Potential Acquisition of Wiz

Deal Specifics

  • Acquirer: Alphabet Inc. (parent company of Google LLC)
  • Target: Wiz Inc., an Israeli cloud security firm
  • Reported Deal Value: ~$30 billion
  • Previous Talks:
    • Initial offer: $23 billion in late 2023
    • Talks collapsed due to regulatory concerns

Wiz Background

  • Founders: Assaf Rappaport, Ami Luttwak, Yinon Costica, Roy Reznik (formerly of Microsoft’s Cloud Security Group and Adallo Inc.)
  • Founded: 2020
  • Platform:
    • Detects vulnerabilities and malicious activity in cloud environments.
    • Supports AWS, Azure, GCP, and Kubernetes APIs.
    • Features include risk-weighted vulnerability ranking and real-time insights.

Funding & Growth

  • Total Funding: $1.9 billion
  • Recent Round:
    • $1 billion raised on a $12 billion valuation (up from previous rounds)
  • Acquisitions:
    • Raftt: $40–$50 million
    • Gem Security: $350 million
    • Dazz Inc.: $450 million

Market Position

  • Wiz is a leading player in cloud security, competing with established firms like CrowdStrike and Palo Alto Networks.
  • The acquisition would position Alphabet as a major player in enterprise cybersecurity.

Competitive Landscape

  • Alphabet’s Strategic Move:
    • Strengthens Google Cloud's security offerings.
    • Addresses growing demand for cloud security solutions.
  • Industry Trends:
    • Increasing adoption of cloud services driving demand for security tools.
    • Consolidation in cybersecurity sector (e.g., Microsoft’s acquisition of OpenAI, AWS’s security investments).

Regulatory Considerations

  • Regulatory hurdles were a key issue in the previous $23 billion deal.
  • The higher valuation ($30B vs. $23B) may address investor concerns about deal timing.

Financial Implications

  • For Alphabet:
    • Largest acquisition in Google/Alphabet history (vs. Motorola Mobility’s $12.5B in 2011).
    • Strategic bet on cybersecurity, a high-growth market.
  • For Wiz:
    • Provides exit at ~12x valuation increase (from earlier rounds).
    • Secures long-term growth and integration with Google Cloud.

Long-Term Effects

  • Enhanced Ecosystem:
    • Integration of Wiz’s platform with Google Cloud could create a powerful security offering.
  • Investor Impact:
    • Potential for Alphabet to justify premium valuation through strategic acquisitions.
    • Wiz investors may see significant returns if the deal closes.

Precedents

  • Previous large tech acquisitions:
    • Mandiant by Google: $5.4 billion
    • Microsoft’s acquisition of Adallo: $320 million

Conclusion

The potential $30 billion acquisition of Wiz represents a significant strategic move for Alphabet to bolster its cloud security capabilities and compete in the rapidly growing cybersecurity market. The deal underscores the importance of securing cloud infrastructure as businesses increasingly rely on cloud services. If finalized, it would be Alphabet’s largest acquisition to date and further solidify Google’s position in enterprise security solutions.