Alphabet, Google’s parent company, is set to acquire cloud security startup Wiz for $32 billion in a deal that will be the largest in the tech giant’s history.

Wiz was founded in 2020 by former members of Israel’s elite cyber intelligence unit and is now headquartered in the U.S. The company specializes in cloud security and has rapidly become one of the fastest-growing software startups, providing security services to nearly half of the 100 largest U.S. companies.

The move from Alphabet comes after previous negotiations in 2023 fell through. At the time, the company had considered a $23 billion acquisition, but concerns from Wiz’s board and investors about potential antitrust issues caused the talks to stall.

Announced on Tuesday, March 18, the all-cash transaction is expected to attract scrutiny from the Federal Trade Commission (FTC). The U.S. agency, under the leadership of Andrew Ferguson, has maintained its firm stance on regulating major corporate mergers, a position inherited from former FTC chair Lina Khan.

As part of the agreement, Wiz employees will receive a retention bonus package worth up to $1 billion. Additionally, should the deal face regulatory roadblocks, Alphabet would owe Wiz a breakup fee, according to sources familiar with the negotiations.

The acquisition comes at a time when mergers and acquisitions in the tech industry have slowed. Uncertainty surrounding trade policies and a cautious regulatory environment under the Trump administration have made large-scale deals more challenging. Vice President JD Vance has previously expressed concerns about Big Tech’s influence, stating that the industry holds too much power.

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Before agreeing to this deal, Wiz had been exploring an initial public offering after its discussions with Alphabet last year fell apart. The startup last secured $1 billion in funding in 2022, which placed its valuation at $12 billion. Investors include Andreessen Horowitz, Lightspeed Venture Partners, Thrive Capital, Sequoia Capital, and others.

For Alphabet, this acquisition represents a significant push to strengthen its cloud computing business. Google Cloud currently lags behind its competitors, holding a 12% global market share — well behind Microsoft’s Azure at 21% and Amazon Web Services, which dominates with nearly 33%.

This deal dwarfs Alphabet’s previous acquisitions. Its largest prior purchase was Motorola Mobility in 2012 for $12.5 billion, which it later sold. More recently, in 2022, Alphabet acquired cybersecurity firm Mandiant for $5.4 billion to enhance Google Cloud’s security offerings.

With this acquisition, Alphabet is making a major bet on cybersecurity as a crucial pillar of its cloud strategy, aiming to reduce its reliance on search advertising and compete more aggressively in the cloud market.