Google's potential deal to acquire Israeli cloud cybersecurity startup Wiz is presenting a new challenge to see how President Trump's antitrust regulators will react to Big Tech's moves. While there is no certainty about the approval of the $32 billion all-cash merger between Wiz and Google Cloud, there are indications that the deal is in a better position now compared to when it was first considered under the Biden administration.
Optimism surrounding the approval of the deal stems from the possibility that Trump's antitrust enforcers may be inclined to be more flexible in cases where companies can argue that the merger would benefit the U.S. in the global competition for dominance in artificial intelligence.
Experts like Michael Carrier, an antitrust law professor at Rutgers Law School, foresee a thorough review of the deal but anticipate that it will likely be sanctioned due to a perceived less stringent stance on merger opposition and the AI aspect.
If finalized, this acquisition would mark Alphabet's largest-ever purchase, with Wiz employing AI technology to bolster its core business of offering cloud security solutions to major tech companies like Google, Amazon, Microsoft, and Oracle. Sundar Pichai, Google's CEO, emphasized during a recent webcast that this acquisition would help the company address the increasing risks posed by AI-driven cloud security breaches.
Wiz's CEO Assaf Rappaport also highlighted during the same webcast that the merged entity would advance the integration of AI-driven cybersecurity tools to identify threats, examine cloud security setups for vulnerabilities, and automate AI-based solutions.
Despite this potential deal and regulatory considerations, Alphabet's stock faced a downturn of nearly 3% amidst a general decline in tech stock prices on Tuesday.
The move comes following hints that Trump's antitrust regulators may adopt a more lenient approach towards AI-related issues. The Department of Justice, under Trump's administration, supported Google's ability to retain its AI interests even if the company is subject to breakup, following a court ruling on Google's monopoly in online search markets. Trump also revoked a directive by President Biden on AI responsibility on his first day in office, providing a lighter regulatory touch towards AI development.
Further, a bipartisan AI task force in Congress stated in a December report that lawmakers would adopt a "wait and see" approach to AI regulation, aligning with the lighter regulatory stance on AI enforcement.