Google Acquires Wiz for $32B: Cloud Security Boost

Google Announces Historic Acquisition of Wiz

In a landmark move, Google’s parent company, Alphabet, is set to acquire Wiz, a leading cloud security startup, in an all-cash transaction valued at $32 billion. This represents the largest acquisition in Google’s corporate history, and the agreement has now been officially confirmed.

Deal Details and Employee Compensation

Initial reports indicated a potential deal value of $33 billion. This figure incorporates $1 billion allocated for retention bonuses, designed to incentivize employees to remain with the company following the acquisition. Considering Wiz’s workforce of 1,700 individuals, this translates to an average of over $588,000 per employee, with actual amounts varying based on individual salaries.

Maintaining Platform Independence

Wiz will continue to operate as an independent platform, supporting all major cloud providers, and will not be limited to Google Cloud Platform. This multi-cloud strategy is crucial in today’s diverse technological landscape.

Future Growth and Expansion

The acquisition is expected to fuel further expansion of the business through increased hiring and potentially additional acquisitions, a strategy Wiz had already been pursuing.

Financial Performance and Autonomy

Currently, Wiz generates $700 million in annual recurring revenue. The arrangement is being compared to the relationship between LinkedIn and Microsoft, characterized by a degree of autonomy within the larger organizational structure. It’s worth noting that LinkedIn’s reliance on Microsoft services has grown over time.

Regulatory Approvals and Timeline

The deal is contingent upon receiving necessary regulatory approvals, with completion anticipated in 2026. Google’s previous largest acquisition was Motorola Mobility in 2011, for $12.5 billion.

On-Again, Off-Again Negotiations

Discussions regarding this acquisition have been ongoing for nearly a year, with renewed activity this week at a $30 billion price point.

Leadership and Integration

Thomas Kurian, CEO of Google Cloud, is currently leading the deal from Google’s side. Upon completion, Wiz will fall under his leadership, signifying a significant investment in cloud security capabilities for the company. Assaf Rappaport, CEO of Wiz, is presently based in Israel.

Shared Vision for Cybersecurity

“Google Cloud and Wiz share a joint vision to make cybersecurity more accessible and simpler to use for organizations of any size and industry,” stated Kurian. “Enabling more companies to prevent cyber attacks, particularly in complex software environments, will minimize the cost and disruption caused by cybersecurity incidents.”

Previous Acquisition Attempts

Last year, Google initially offered $23 billion for Wiz, but negotiations stalled due to concerns surrounding antitrust regulations, Wiz’s developmental autonomy within Google Cloud, and the overall price.

Changing Regulatory Landscape

A shift in the U.S. regulatory environment is believed to be creating a more favorable climate for large technology acquisitions.

Strategic Importance for Google Cloud

This acquisition is strategically important for Google as it seeks to strengthen its position in the enterprise cloud market, where it currently trails behind AWS and Microsoft Azure. It also bolsters Google’s security offerings, complementing existing products like Mandiant.

Wiz’s Growth Trajectory

Wiz is poised to double its annual recurring revenue to $1 billion, making it a highly attractive acquisition target.

Synergy with Artificial Intelligence

The Wiz acquisition may also complement Alphabet’s investments in artificial intelligence, potentially mitigating risks associated with emerging technologies.

The Evolving Security Landscape

“The increased role of AI, and adoption of cloud services, have dramatically changed the security landscape for customers, making cybersecurity increasingly important in defending against emergent risks and protecting national security,” Google emphasized in its announcement.

Investor Returns and Valuation

The acquisition doubles Wiz’s valuation from $16 billion, achieved in a secondary sale following the initial deal collapse in 2024, resulting in substantial returns for Wiz’s investors, including Sequoia, Cyberstarts, and Salesforce.

Prior Fundraising and Potential Alternatives

Wiz was reportedly considering fundraising at an even higher valuation before the acquisition. The company’s founders previously founded and sold a security startup to Microsoft, which formed the foundation of Microsoft’s cloud security business.

Wiz’s Decision to Pursue Acquisition

During a previous appearance at Disrupt, Rappaport indicated that Wiz had proactively chosen to end the initial acquisition talks, describing it as a difficult but ultimately correct decision.

Financial Outcome

This outcome appears to validate that strategic decision.

Further details will be provided following the investor call later today.