Alphabet’s (NASDAQ:GOOG) proposed $32 billion takeover of cloud-security startup Wiz is under early-stage scrutiny by the U.S. Department of Justice over fears it could stifle competition.
The deal, announced in March, would fold Wiz into Google Cloud while preserving its cross-platform integrations with Amazon (NASDAQ:AMZN) AWS, Microsoft (NASDAQ:MSFT) Azure and Oracle (NYSE:ORCL) Cloud. Wiz, founded in Israel in 2020 and now headquartered in New York under CEO Assaf Rappaport, offers AI-driven real-time threat detection and response.
Alphabet had nearly closed on a roughly $23 billion purchase of Wiz last summer before regulatory worries derailed talks, and the DOJ’s antitrust arm is now examining whether the new agreement could illegally limit rivals’ access to advanced security tooling.
Cloud-security spending is on pace to exceed $12 billion this year as enterprises race to secure hybrid and multi-cloud environments, and Wiz has rapidly gained traction among Fortune 500 customers. Alphabet’s integration plan promises deeper embedding of Wiz’s AI models into Google’s security stack, but rivals warn that exclusive control over Wiz’s roadmap could tilt the playing field.
Why it matters: A DOJ challenge or conditions could slow Google’s push to differentiate its cloud offering through bespoke security services, potentially leaving enterprises and channel partners in limbo.
This article first appeared on GuruFocus.
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