Google parent company Alphabet has agreed to buy cybersecurity start-up Wiz for $32 billion in its largest acquisition ever, as it seeks to bolster its position in the competitive cloud services market.

The all-cash deal, announced on Tuesday, comes after Wiz reportedly rejected a $23 billion takeover offer from Alphabet last summer, partly due to concerns about gaining regulatory clearance.

Wiz, which was founded in 2020 by alumni of the Israeli intelligence corps' unit 8200, offers a cloud security platform that scans data stored on major providers including Amazon Web Services and Microsoft Azure for potential security risks.

Sundar Pichai, chief executive officer of Google, said: "Together, Google Cloud and Wiz will turbocharge improved cloud security and the ability to use multiple clouds. Today, businesses and governments that run in the cloud are looking for even stronger security solutions, and greater choice in cloud computing providers."

Alphabet has agreed to pay a $3.2 billion termination fee if the deal fails to complete, marking a test of the Trump administration's approach to regulating Big Tech mergers.

Following the acquisition, Wiz will join Google Cloud but will continue to operate across all major cloud platforms including Amazon Web Services, Microsoft Azure and Oracle Cloud.

Assaf Rappaport, co-founder and chief executive officer of Wiz, said: "This is an exciting moment for our company, but an even more important one for customers and partners, as this acquisition will bolster our mission to improve security and prevent breaches by providing additional resources and deep AI expertise."

The deal represents a significant premium over Wiz's $12 billion valuation from a private funding round last May. The company reportedly generates about $750 million in annual revenue.

Thomas Kurian, chief executive officer of Google Cloud, said: "Google Cloud and Wiz share a joint vision to make cybersecurity more accessible and simpler to use for organizations of any size and industry. Enabling more companies to prevent cyber attacks, including in very complex business software environments, will help organisations minimise the cost, disruption and hassle caused by cybersecurity incidents."

The acquisition is expected to close in 2026, subject to regulatory approvals, and comes as Google attempts to catch up with Microsoft and Amazon in the cloud services market. Alphabet currently holds about 12 per cent of the global cloud market, trailing Microsoft Azure at 21 per cent and Amazon Web Services at nearly a third.

Alphabet shares fell by nearly 3 per cent following the announcement of the deal.

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