San Francisco. Google has agreed to acquire cybersecurity firm Wiz for $32 billion, marking the tech giant’s largest-ever acquisition as it faces potential regulatory scrutiny over its dominance.

The proposed all-cash deal, announced Tuesday, aligns with Google’s aggressive expansion into cloud computing amid a surge in artificial intelligence. The growing demand for data centers—critical for AI infrastructure—has intensified competition among Google, Microsoft, and Amazon.

If approved by regulators, Wiz will become part of Google Cloud, a division that has gained prominence alongside Google’s search and advertising businesses, which generate most of parent company Alphabet’s $350 billion in annual revenue. The cloud division’s revenue soared from $26.3 billion in 2022 to $43.2 billion in 2023, reflecting its rapid growth.

Founded in 2020 by four longtime friends who met in the Israeli army, Wiz has grown into a major cybersecurity player, developing tools to protect data stored in cloud environments. The company, now headquartered in New York, is expected to generate $1 billion in revenue this year.

“Wiz and Google Cloud share a vision that cloud security should be easier, more accessible, more intelligent, and democratized, so more organizations can securely adopt cloud and AI,” Wiz CEO Assaf Rappaport wrote in a blog post.

Google CEO Sundar Pichai said in a conference call Tuesday that integrating Wiz into Google Cloud will enhance security while lowering costs. His comments were likely aimed at both prospective customers and regulators, who are expected to scrutinize the deal’s impact on competition and pricing.

Google had been pursuing Wiz for some time before settling on the $32 billion price tag—well above the reported $23 billion offer Wiz rejected last July. At that time, Wiz had planned to go public, but recent stock market volatility dampened the IPO market, prompting the company to opt for acquisition instead.

Wedbush analysts called the deal “a shot across the bow” at Microsoft and Amazon, which have also heavily invested in cybersecurity. Google has lagged behind its rivals in cloud computing, but acquiring Wiz could help it close the gap.

The $32 billion acquisition eclipses Google’s previous largest purchase—the $12.5 billion takeover of Motorola Mobility in 2012. It would also rank as the biggest cybersecurity acquisition ever and one of the 20 most expensive software deals in history, according to financial intelligence firm Mergermarket.

As is common with high-priced acquisitions, investors reacted cautiously. Alphabet’s shares fell 2 percent on Tuesday, closing at $160.67.

Some of Google’s past acquisitions have been highly successful, such as its $1.76 billion purchase of YouTube in 2006 and its $3.1 billion takeover of ad tech platform DoubleClick in 2008. More recently, its $5.4 billion acquisition of cybersecurity firm Mandiant in 2022 contributed to Google Cloud’s growth, with the division reporting an operating profit of $6.1 billion last year.

However, Google’s acquisitions have also attracted regulatory scrutiny. The DoubleClick deal is now central to an antitrust case brought by the US Justice Department, which accuses Google of abusing its dominance in digital advertising. A ruling is expected later this year.

Google is also facing regulatory challenges elsewhere. Last year, a federal judge found that Google had unlawfully maintained its search engine monopoly. The penalty phase of that trial begins next month, with the Justice Department seeking measures such as forcing Google to divest its Chrome browser and banning agreements that make Google Search the default on Apple and other devices.

The Wiz acquisition is likely to undergo intense regulatory review. While the Trump administration has signaled a more business-friendly stance, it has also expressed concerns about further consolidation in Big Tech. Federal Trade Commission Chairman Andrew Ferguson has been vocal about keeping the industry in check.

Antitrust concerns were among the reasons Wiz previously walked away from talks with Google last year when the Biden administration was blocking several tech deals. Now, analysts suggest that both companies are more confident about securing approval under the Trump administration.

“The two sides likely wouldn’t have struck the deal if they didn’t see a viable path to closing,” Mergermarket analysts Kevin Ketcham and Kevin McCaffrey wrote in a note Tuesday.

However, some groups remain opposed. The consumer advocacy organization Demand Progress Education Fund urged regulators to block the acquisition. “It’s time to prove whether they have the guts to stop a big fish from swallowing an even bigger one,” said Emily Peterson-Cassin, the group’s director of corporate power.

If regulators approve the deal and other conditions are met, Google and Wiz expect to finalize the acquisition in 2026.