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Alphabet said in talks to buy cyber firm Wiz for $33 billion

Alphabet said in talks to buy cyber firm Wiz for $33 billion

  • 18.03.2025 02:04
  • cnbctv18.com
  • Keywords: dangerous, success

Alphabet Inc. is in talks to acquire cloud-security firm Wiz for $33 billion, reigniting negotiations that were halted last summer. The deal could help Google compete with Microsoft and Amazon in the cloud market but may face antitrust scrutiny.

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Alphabet

Alphabet

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Analyst rating: Buy

Alphabet is in talks to buy Wiz for $33 billion, which could be their largest acquisition and help Google compete with Microsoft and Amazon in cloud computing.

Wiz Inc.

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Analyst rating: N/A

Wiz's potential sale to Alphabet could make it a major player in cybersecurity, competing against companies like CrowdStrike and Palo Alto Networks.

Context

Analysis of Alphabet's Potential Acquisition of Wiz Inc.

Key Facts and Data Points

  • Deal Value: Alphabet is in talks to acquire Wiz Inc. for $33 billion, marking the largest acquisition in Alphabet’s history if finalized.
  • Previous Attempt: The deal was previously called off last summer after extended negotiations, but discussions have resumed.
  • Market Position:
    • Google Cloud ranks as the third-largest player in the cloud-computing market, behind Microsoft Azure and Amazon Web Services (AWS).
    • Wiz Inc. is a cloud-security company, valued at $12 billion in its last funding round.
  • Investors: Wiz’s investors include prominent firms such as Sequoia Capital, Index Ventures, Insight Partners, and Cyberstarts.

Market Implications

  • Cloud Computing Competition: The acquisition would position Google Cloud to better compete with Microsoft Azure and AWS, particularly in the growing cybersecurity segment of cloud services.
  • Profitability vs. Growth: While Google Cloud has become profitable, its sales growth has slowed, making strategic acquisitions like Wiz potentially critical for future expansion.

Strategic Considerations

  • Regulatory Concerns:
    • The deal may face antitrust scrutiny, as Alphabet has faced multiple antitrust challenges in the past, including cases related to search and advertising dominance.
    • Wiz’s previous rejection of Alphabet’s offer was partly due to concerns about regulatory hurdles, particularly in the U.S. and Europe.
  • Wiz’s Independence:
    • Wiz had previously decided to remain independent and pursue an IPO after rejecting Alphabet’s $23 billion offer last year.

Competitive Dynamics

  • Cybersecurity Market: The acquisition would strengthen Google’s position in the cybersecurity market, where key competitors include CrowdStrike and Palo Alto Networks.
  • Strategic Fit: Wiz’s expertise in cloud security aligns with Alphabet’s broader goals of expanding its cloud services and enhancing its competitive edge.

Long-Term Effects

  • Potential Market Dominance: If successful, the acquisition could significantly alter the dynamics of the cloud-computing market, potentially increasing Alphabet’s influence.
  • Regulatory Outcomes: The deal’s success will depend on navigating antitrust concerns, particularly given Google’s existing legal challenges in other areas.

Conclusion

The potential $33 billion acquisition of Wiz by Alphabet represents a significant strategic move to bolster Google Cloud’s position in the competitive cloud-computing market. However, it also faces substantial regulatory and competitive hurdles that could impact its success.