Alphabet to buy Wiz for $32 billion in its biggest deal to boost cloud security

Alphabet to buy Wiz for $32 billion in its biggest deal to boost cloud security

  • 18.03.2025 13:19
  • channelnewsasia.com
  • Keywords: Alphabet, Wiz

Alphabet agreed to buy Wiz for $32 billion, marking its largest deal yet to enhance cloud security and compete with Amazon and Microsoft in the cloud-computing sector. The acquisition aims to bolster Google's cloud business with Wiz's AI-powered solutions, addressing critical risks for enterprises.

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Alphabet

Alphabet

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Analyst rating: Buy

Alphabet is acquiring Wiz to boost its cloud security, which will help it compete against Amazon and Microsoft.

Wiz

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Analyst rating: N/A

Wiz is being acquired by Alphabet for $32 billion, which will provide significant financial benefits and enhance their market position in cybersecurity.

Context

Analysis and Summary: Alphabet's $32 Billion Acquisition of Wiz

Key Facts and Data Points

  • Acquisition Details: Alphabet (Google's parent company) agreed to acquire Wiz for $32 billion, marking its largest deal to date.
  • Previous Offer: Google had offered approximately $23 billion for Wiz last year, but the deal collapsed due to antitrust concerns.
  • Wiz Valuation: Wiz was valued at $12 billion in a funding round last May.
  • Deal Structure: The acquisition is an all-cash deal expected to close by 2026, after which Wiz will join Google's cloud unit.

Market Implications

  • Cloud Security Race: Alphabet aims to strengthen its position in the cloud-computing market, competing against Amazon and Microsoft.
  • AI-Powered Solutions: Wiz's AI-driven cybersecurity solutions will enhance Google Cloud's offerings, particularly in mitigating risks associated with generative AI services like ChatGPT.
  • Regulatory Environment: Despite a challenging regulatory landscape in 2024, Wall Street is optimistic about the Trump administration easing antitrust policies.

Competitive Dynamics

  • Strategic Acquisitions: Alphabet has a history of acquiring cybersecurity firms, including Mandiant for $5.4 billion in 2022, to bolster its capabilities.
  • Wiz's Partnerships: Wiz collaborates with major cloud providers like AWS, Azure, and Oracle, while its customers include Morgan Stanley, BMW, and LVMH.

Industry Trends

  • Cybersecurity Growth: Interest in cybersecurity has surged post the global CrowdStrike outage, prompting companies to invest heavily in online security.
  • AI's Role: The rise of generative AI services has increased demand for robust cybersecurity solutions to mitigate risks.

Long-Term Effects and Strategic Considerations

  • Market Expansion: By integrating Wiz's solutions, Google Cloud aims to attract more enterprise customers seeking advanced security features.
  • IPO Plans: After the failed deal with Google last year, Wiz had considered an IPO and focusing on higher recurring revenue streams.

Financial Impact

  • Share Performance: Alphabet shares were marginally down in premarket trading, following a 35% rise in 2022 but a 13% decline so far in 2025 due to investor concerns over AI investments.

This acquisition underscores Alphabet's commitment to leadership in the cloud and cybersecurity sectors, positioning it for long-term growth despite regulatory challenges and competitive pressures.