Why Google made a bet of $ 32 billion in Wiz

Google's last acquisition is the most expensive so far, and perhaps it is also more risky. On Tuesday, the search giant announced that it acquired the start of Wiz cloud security for $ 32 billion. It is an important bet that Wiz can help reinforce Google's cloud business, which earns much less money than offers built by its biggest rivals. But to do that, Google faces real challenges that make up this expensive acquisition and dodging regulatory concerns about what will surely be a high profile purchase.

Both Microsoft and amazon have generously benefited from ai Cloud Gold Rush, with their cloud services that report income $ 105.4 billion and <a target="_blank" href="https://ir.aboutamazon.com/news-release/news-release-details/2025/amazon.com-Announces-Fourth-Quarter-Results/”>$ 107.6 billionrespectively, during fiscal year 2024. Google, on the other hand, is a minor player compared; Your cloud income exceeded only $ 43 billion In 2024. With the ai ​​boom that shows no signs of stopping, Google may have found a way to reduce the gap with its companions technological titans, even if you have to spend billions of dollars to get there.

“Security is a fundamental priority for CEOs and government leaders around the world, but the landscape is changing,” said Google CEO, Slundar Pichai during An inverter calls. “The rhythm and impact of infractions are accelerating. IA brings new risks, but also new opportunities … Together, we believe that this and Google Cloud can accelerate the ability of organizations to improve their safety.” The agreement will bring Wiz under the umbrella of Google Cloud.

Although Google was in conversations to buy Wiz last year for $ 23 billion, Wiz retired due to concerns about the rejection of federal regulators and plans Present an initial public offer. With the most friendly Trump administration with the merger in control, companies can forge a path beyond regulatory obstacles.

Founded in 2020, Wiz has quickly become one of the fastest growing software companies in the world. His leadership team has a success history in the new cloud companies: the Wiz CEO, Assaf Rappaport and several members of their executive team were also behind Adallom, the cloud security startup that Microsoft bought for $ 320 million in 2015 and Then renamed as Microsoft defender for cloud applications.

Along with what Forbes calls A “hyper aggressive” approach for commercial and maintenanceless safety software, Wiz is killing in the increasing the ai ​​industry. It offers a solution called security without agent, which means that companies do not have to spend hours implementing individual security programs, or agents, in each device they wish to ensure. It connects to an environment in the cloud remotely, allowing experts to supervise their configuration using a digital twin, or a copy of a cloud configuration that they can use to simulate the impact of possible threats.

Other companies, such as Palo Alto Networks and Crowdstrike, offer similar security tools. But Wiz's execution is different. “Anyone can do without agent,” said Neil Macdonald, vice president and distinguished analyst of Gartner The edge last year. “It's how this digital twin model is bind and build and identify, prioritize and help customers, remedy risk … That is what they are really very good.”

Wiz also offers an easy -to -use user interface that Macdonald says it is one of the “best” in its category. A tool presents a web graph that shows all connections in an environment of the cloud and how a rape could affect it, while another continuously scan a cloud configuration to find and identify risks. These types of characteristics will only become more important as the main companies, and their users, trust their data to the cloud, either for storage or to process applications with ai.

As a flood of new ai companies continues to buy for a cloud supplier, they could take into account the integration of Google Cloud with Wiz. The company Bill yourself How to serve “customers of all business sizes, from new companies to Fortune 100s”. Wiz marketing has been worth it, with Rappaport climbing the startup of $ 1 million in annual revenues to $ 100 million in only 18 months in 2022. Wiz has since reached $ 350 million in annual revenues, and almost half of all companies in the 100 main ones in the Fortune list use the software. In May 2024, the startup collected $ 1 billionputting the company's valuation in around $ 12 billion.

For Google, that long -range hearing is a great advantage. The search giant could use this acquisition as an opportunity to make some of Wiz's clients Google Cloud, according to A 2024 report of The information. Currently, Operai uses Microsoft Azure to execute its ai services, while Anthrope, the company behind Claude, runs on AWS and Google Cloud. Another company of ai, Midjourney, <a target="_blank" href="https://www.prnewswire.com/news-releases/midjourney-selects-google-cloud-to-power-ai-generated-creative-platform-301771558.html#:~:text=Midjourney%20selected%20Google%20Cloud%20as,models%2C%20scalability%2C%20and%20sustainability.”>Selected Google Cloud as your supplier. And with Microsoft cybersecurity practices that face greater scrutiny, it is a good time for Google to enter the cloud security game.

Customers do not even have to choose Google Cloud as their supplier for Google to benefit. Since Wiz is integrated directly with the services offered by Google, amazon, Microsoft, Oracle and others, Google can be established as a security provider beyond its cloud offer. In addition to Wiz, Google's growing security portfolio includes Mandiant, Virustotal and Chronicle (now known as Google Security Operations). “Google wants to become a serious business security provider,” MacDonald said. “Wiz helps strengthen your credibility as a business security player.”

“For Google, this would be an opportunity through Microsoft and amazon's bow, making a great commitment to cyber security space,” Wedbush analyst, Dan Iives, <a target="_blank" href="https://seekingalpha.com/news/4124200-google-wiz-deal-shot-across-the-bow-at-microsoft-amazon-spur-ma-wedbush”>wrote in an investor note When the agreement was rumored for the first time last year. “This would give Google an advantage in a series of cloud implementations and further monetize the space of the cyber security cloud with less than 50% of the workloads that are not in the cloud worldwide.”

But the agreement does not come without its risks. Google's parent company, Alphabet, agreed to a reverse termination rate of $ 3.2 billion, according to A report of Financial Timeswhich calls the amount “among the highest of all time.” Adobe of $ 1 billion paid Figma after he left his acquisition of $ 20 billion and the $ 94 million that amazon paid Irobot.

Even with President Donald Trump in office, Google is expected to extract the scrutiny of federal regulators. Andrew Ferguson, Trump's election for the president of the Federal Trade Commission, said in A February memorandum that he would keep the Fusion guidelines designed under The FTC led by Lina Khan in 2023. Even so, Ferguson has indicated that it is “more open to the use of settlements to resolve concerns about proposed mergers, instead of demanding to block potentially problematic offers in each case”, as reported by The Wall Street Journal.

Google is also in the middle of an active antimonopoopoopoolio case that could force the company to sell Chrome, a recommendation, federal judge Amit Mehta reaffirmed earlier this month. A separate antitrust essay, which accuses Google to monopolize the advertising technology market, concluded at the end of last year. With its acquisition of Wiz, Google will inherit Patent violation demand The startup faces the cloud cyber security company. In the demand, Orca accuses WIZ of “ongoing and unauthorized use of patented orca technologies.”

In addition to possible legal problems, Google has fought to integrate great acquisitions in the past, such as the purchase of $ 12.5 billion of Motorola mobility in 2012, which was largely considered as a failure. Later, the acquisition of nests of $ 3.2 billion Google led to a chaotic restructuring and the departure of the Smart Home and former CEO brand.

The bet of $ 32 billion of Google is that the opportunity here is much greater than any of these concerns: Wiz could put Google services on the map at a turning point for cloud computing and ai.