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

  • 23.03.2025 04:09
  • cyprus-mail.com
  • Keywords: Alphabet, Wiz

Alphabet agreed to buy cybersecurity firm Wiz for $32 billion, its largest deal yet, to enhance Google Cloud's security capabilities and better compete with Amazon and Microsoft in the cloud market.

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Estimated market influence

Alphabet

Alphabet

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Analyst rating: Buy

Alphabet is acquiring Wiz to boost its cloud security and compete with Amazon and Microsoft.

Wiz

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Analyst rating: N/A

Wiz will be acquired by Alphabet, enhancing Google's cloud security capabilities.

Context

Business Insights and Market Implications

  • Acquisition Details: Alphabet (Google's parent company) agreed to acquire Wiz, a cybersecurity startup, for $32 billion in cash. This is Alphabet's largest deal to date.

  • Strategic Focus: The acquisition aims to strengthen Google's cloud security capabilities, particularly with AI-powered solutions, to better compete against Amazon Web Services and Microsoft Azure.

  • Wiz's Growth and Valuation:

    • Wiz was valued at $12 billion in a funding round last May.
    • The startup is one of the fastest-growing software companies, working with major cloud providers and customers like Morgan Stanley, BMW, and LVMH.

  • Market Trends:

    • The cybersecurity market is growing due to increased enterprise spending post-global outages (e.g., CrowdStrike outage in late 2023).
    • AI-driven security solutions are becoming critical as attackers adopt advanced technologies.

  • Financial Considerations:

    • Alphabet expects the deal to close by 2026, subject to regulatory approvals.
    • Google Cloud generated over $40 billion in revenue in 2024, outpacing growth in its search business.

  • Regulatory and Competitive Dynamics:

    • The acquisition comes amid a tough regulatory climate but with optimism about potential shifts under U.S. antitrust policies.
    • Alphabet previously outbid Microsoft to acquire Mandiant for $5.4 billion in 2022, highlighting the competitive nature of the cybersecurity market.

  • Alphabet's Capital Allocation:

    • Alphabet has allocated $75 billion for capital expenditures in 2025, primarily for AI investments.
    • The company plans no changes to its capital allocation strategy despite the Wiz acquisition.

  • Market Reaction:

    • Google shares dropped nearly 3% in early trading amid broader market weakness.
    • Investors remain concerned about heavy AI spending and competition from China's DeepSeek.

  • Long-Term Effects:

    • The deal underscores the growing importance of cloud security in the enterprise software sector.
    • Wiz's continued availability across all major cloud platforms ensures its products remain accessible to existing customers.