Sundar Pichai on Google's massive $32 billion Wiz deal: 'We don't make deals like this...'

Tech giant Google has agreed to buy Wiz, a fast-growing cybersecurity startup, for $32 billion. This is the company's biggest push to strengthen its cloud-computing business and expand beyond the search engine and consumer internet services that made it a household name. The all-cash deal, announced Tuesday, would be Google's largest, easily surpassing its $12.5 billion purchase of Motorola Mobility in 2012, according to NYT.

This is the company's largest acquisition in its history. Google CEO Sundar Pichai and Google Cloud CEO Thomas Kurian reached out to employees telling them "why, and why now" in internal memos, as per Business Insider. An email was sent to Google staff on Tuesday in which the tech giant's top bosses explained why the company plans to spend $32 billion to acquire the cybersecurity startup, which marked the year's biggest deal so far — and the biggest deal of all time for Alphabet.

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What Sundar Pichai told employees

"We don't make deals like this every day, so I wanted to share a little more about why, and why now," Google CEO Sundar Pichai wrote in an email, before summarizing some of what was included in the company's public blog post about the deal on Tuesday.

Google Cloud CEO Thomas Kurian emphasized that the announcement comes at a crucial moment as businesses rapidly shift their data to the cloud. "Most deployments now span multiple clouds or hybrid environments, creating complex management challenges," Kurian noted in a memo to employees.

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The acquisition aligns with key trends in the AI-driven era, particularly the demand for enhanced cloud security and multicloud functionality. Wiz, a company specializing in cloud security by scanning data and detecting risks, will remain available on other cloud platforms, including Amazon Web Services and Microsoft Azure.

Kurian underscored AI’s growing impact on cybersecurity: "The rise of AI has intensified both the threats posed by and against AI models." He added, "By joining forces, Google Cloud and Wiz aim to revolutionize security design, operations, and automation for the future."

Google-Wiz deal

With the deal, Google would get a 5-year-old company that most consumers are unfamiliar with but that a growing number of businesses rely on to protect their cloud applications. The Silicon Valley giant worked for months last year to forge a deal for Wiz, which was most recently valued at $12 billion. In July, Wiz rejected Google's $23 billion takeover offer, saying it wanted to pursue an initial public offering, which never came.

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The splashy purchase, which the companies expect to close in 2026, would inject fresh momentum into Google Cloud, the division that sells computing services to other businesses. It would also be the tech giant's most aggressive effort to keep up with rival Microsoft in cybersecurity.

But first, Alphabet, Google's parent company, would have to clear regulatory hurdles. Google and Wiz resumed talks about a deal in August, after Wiz walked away from an offer the month before, two people with knowledge of the negotiations said. Wiz had begun another round of fundraising when it agreed to Google's offer, two people close to the company said.

If completed, the deal may help reinvigorate Google Cloud's revenue expansion. As the business has grown, its pace has usually slowed, though revenue in the fourth quarter rose a stout 30% from a year earlier, to $12 billion.

Wiz has grown rapidly. Last year, it said it had $350 million in recurring revenue, up from $100 million two years earlier. The company, which is based in New York, has said it plans to reach $1 billion in recurring revenue this year.

(With NYT inputs)