Google’s latest acquisition is the most expensive and perhaps the most risky ever. On Tuesday, the search giant announced it has acquired cloud security startup WIZ for $32 billion. It’s a big bet that Wiz will help strengthen Google’s cloud business. But to do that, Google faces the real challenge of integrating this expensive acquisition with regulatory concerns about ensuring it is a well-known purchase.
Both Microsoft and Amazon are making great profits from AI Cloud Gold Rush, reporting that cloud services reached $15.4 billion and $107.6 billion in 2024, respectively. On the other hand, Google is a minor player compared to it. Cloud revenue exceeded just $43 billion in 2024. With the AI boom showing no signs of a halt, Google may have found a way to narrow the gap with fellow Tech Titans, even if it has to spend billions of dollars to get there.
“While security is a fundamental priority for CEOs and government leaders around the world, the landscape is changing,” Google CEO Sundar Pichai said in an investor’s call. “The pace and impact of violations are accelerating. AI poses new risks, but also new opportunities. With this agreement, Wiz will be brought under Google Cloud Umbrella.
Google was in talks last year to buy Wiz for $23 billion, but Wiz supported it due to concerns over plans to file a pushback from federal regulators and an initial public offering. With the more merger-friendly Trump administration under control, businesses may be able to set paths beyond regulatory hurdles.
Founded in 2020, With has quickly become one of the fastest growing software companies in the world. The leadership team has a history of successful cloud startups. Wiz CEO Assaf Rappaport and several members of his executive team were also behind Adallom. It is a cloud security startup that Microsoft purchased for $320 million in 2015 and later rebranded as Microsoft Defender for Cloud Apps.
Google’s acquisition of Wiz is “Shot across the Bow of Microsoft and Amazon.”
Coupled with what Forbes calls a “aggressive” approach to business and maintenance-free cloud security software, Wiz is killing in the ever-growing AI industry. It offers a solution called agentless security. This means that businesses don’t have to spend hours deploying individual security programs or agents on every device they want to protect. Connect remotely to a cloud environment and enable experts to oversee the setup using a digital twin. You can also use a copy of the crowdsetup that can be used to simulate the impact of a potential threat.
Other companies, such as Palo Alto Networks and Crowdstrike, offer similar security tools. However, the execution of the With is different. “Anyone can do agentless,” Gartner’s VP and well-known analyst Neil Macdonald told The Verge last year. “This is a way to sew and build this digital twin model together to identify, prioritize, support and correct risks.
Wiz also offers a user-friendly UI that says McDonald’s is one of the “best” in the category. One tool is a web chart showing all the connections in a cloud environment and how violations affect it, while another tool continuously scans the cloud setup to find and identify risks. These types of capabilities are only important for large companies and their users to entrust their data to the cloud, whether it’s storage or to process requests with AI.
As the AI startup flood continues to shop for its cloud providers, it may take into account Google Cloud integration with Wiz. The company charges it “serves “customers of all sizes” from startups to Fortune 100s. Wiz’s marketing paid off, with Rappaport expanding its startup from $1 million in annual revenues to $100 million in just 18 months in 2022. Wiz has since reached $350 million in annual revenue. In May 2024, the startup raised $1 billion, bringing the company to a valuation of about $12 billion.
For Google, its wide audience is a huge advantage. According to a 2024 report in Information, the search giant could use the acquisition as an opportunity to convert some of Wiz’s customers to Google Cloud. Currently, Openai uses Microsoft Azure to run AI services, but the AI company behind Humanity – Claude runs on both AWS and Google Cloud. Another AI company, Midjourney, chose Google Cloud as its provider. And with Microsoft’s cybersecurity practices facing an increase in scrutiny, it’s a good time for Google to join the cloud security game.
Customers don’t even have to choose Google Cloud as their provider. Wiz integrates directly with services offered by Google, Amazon, Microsoft, Oracle and more, allowing Google to stand as a security provider beyond the cloud offering. Apart from Wiz, Google’s growing security portfolio includes Mandiant, Virustotal, and Chronicle (now known as Google Security Operations). “Google wants to be a serious enterprise security vendor,” McDonald said. “Wiz helps to enhance your reliability as an enterprise security player.”
“For Google, this is a shot across the bow of Microsoft and Amazon, and it places a big bet on the cybersecurity space,” Wedbush analyst Dan Ives wrote in an investor memo that was first rumored last year. “This gives Google the advantage in many cloud deployments and further monetizes cybersecurity cloud space with less than 50% of its workloads globally in the cloud.”
However, trading does not occur without risk. Google’s parent company Alphabet has agreed to a $3.2 billion reverse termination fee, according to a report from the Financial Times, by calling the amount “of all time.” After abandoning its $20 billion acquisition, the $1 billion Adobe paid to Figma will warn the $94 million Amazon paid to IRobot.
Even with President Donald Trump in office, Google is expected to draw surveillance from federal regulators. Andrew Ferguson, who chose to chair Trump’s Federal Trade Commission, said in a memo in February that he would retain the merger guidelines devised under the Lina Kern-led FTC in 2023. Still, Ferguson shows that “we will use settlements to resolve settlements to resolve concerns about the proposed Merger.”
Google is also in the midst of an active antitrust case where it can force the company to sell Chrome. The independent antitrust law, which accused Google of monopolizing the ad technology market, ended late last year. With the acquisition of Wiz, Google will inherit the patent infringement lawsuit the startup faces from cloud cybersecurity company Orca. In the lawsuit, Orca blames Wiz for “continued and misused use of Orca’s patented technology.”
Aside from potential legal issues, Google has struggled to consolidate large acquisitions in the past. For example, the 2012 Motorola Mobility purchase of $12.5 billion was considered a failure. The acquisition of Google’s $3.2 billion nest resulted in a chaotic restructuring and the departure of Smart Home Brand’s founder and former CEO.
Google’s $32 billion bet means the opportunity here is far greater than any of these concerns. Wiz allows Google services to be placed on maps with cloud computing and AI turning points.
