Confirmed: Google Acquires Wiz for $32 Billion to Strengthen Cloud Security
Google has officially announced the largest acquisition in its history, confirming the purchase of cloud security startup Wiz for $32 billion in an all-cash deal.
Deal Details and Employee Benefits
Initially reported at $33 billion, the total figure includes approximately $1 billion designated for employee retention bonuses, averaging over $588,000 per employee across Wiz's 1,700-person workforce. The precise distribution of these bonuses may vary based on individual employee salaries.
Operational Independence
Despite the acquisition, Wiz will maintain its independence, continuing to operate as a cross-platform solution serving multiple cloud providers beyond Google Cloud Platform. The company plans further expansion, including increased hiring efforts and potential additional acquisitions, continuing the trajectory Wiz has pursued over the past year.
Financial Performance
Wiz currently generates about $700 million in annual recurring revenue (ARR) and is expected to reach the $1 billion ARR milestone by next year, effectively doubling its revenue compared to the previous year. Sources close to the deal liken Wiz's autonomy within Alphabet to Microsoft's handling of LinkedIn, implying significant operational independence despite strategic alignment.
Regulatory Timeline
This substantial acquisition still awaits regulatory approval and other customary clearances, with both companies expecting the transaction to finalize sometime in 2026. Before Wiz, Google's largest purchase was Motorola Mobility in 2011, for $12.5 billion.
Negotiation History
Discussions around Google's acquisition of Wiz have seen fluctuations over the past year. Initially, negotiations stalled in 2024 amid antitrust concerns, valuation disagreements, and questions surrounding Wiz's future autonomy under Google Cloud. At that time, Wiz had just been valued at $12 billion after a substantial funding round.
Strategic Alignment
With a change in the U.S. administration and an anticipated favorable regulatory environment for tech acquisitions, Google revisited the deal. Thomas Kurian, CEO of Google Cloud, spearheaded the negotiations, highlighting the strategic importance Google places on cloud security as a critical growth area.
"Google Cloud and Wiz share a joint vision to make cybersecurity more accessible and simpler to use for organizations of any size and industry," Kurian stated. He emphasized that improved cybersecurity solutions would significantly reduce the financial and operational impact of cyberattacks on businesses worldwide.
Market Position and Strategy
Strategically, Wiz represents an attractive opportunity for Google to enhance its enterprise cloud offerings, an area where it currently trails rivals AWS and Microsoft Azure. Wiz's extensive growth and substantial market presence in cybersecurity complement Google's existing security services, such as those provided by Mandiant, by offering a more comprehensive and scalable security portfolio.
AI and Cloud Security Integration
Additionally, this acquisition aligns strategically with Alphabet's expanding investments in artificial intelligence (AI). Google emphasized how the rise of AI and broader cloud adoption have amplified the importance of robust cybersecurity to protect against emerging threats and safeguard national interests.
Investor Impact
This acquisition provides a significant windfall for Wiz's investors, doubling its recent secondary sale valuation of $16 billion. Wiz's investor base includes prominent firms such as Sequoia, Cyberstarts, Index Ventures, Salesforce, Thrive Capital, Greenoaks, and numerous others.
Leadership Background
Previously, Wiz founders, including CEO Assaf Rappaport, co-founded another cybersecurity startup acquired by Microsoft, which became foundational to Microsoft's cloud security division. At TechCrunch Disrupt last year, Rappaport indicated openness to acquisitions while affirming the decision to walk away from Google's initial offer was difficult yet ultimately "the right choice."
Conclusion
This historic deal signifies a pivotal moment for both Google and Wiz, reshaping the landscape of cloud security and underscoring Google's aggressive strategy to bolster its competitive positioning in enterprise cloud services.
Image credit: Google Cloud. The Google Cloud Image used in this article is the property of Google Cloud.
