The Google-Wiz offer is litmus test for the Trump administration’s handling of Big Tech, and it is &#039.

Alphabet was launched seven months ago. lost a marquee case against the Biden administration’s Justice Department, which accused the company of maintaining an illegal monopoly in search. Weeks earlier, Google’s pursuit of cybersecurity vendor Wiz, in what would have been its largest deal ever, in part because of antitrust concerns.

With resumption in the White House, Alphabet is again on the offensive.

According to Alphabet, the company said it expects the offer to similar future time, subject to regulatory approvals, and on Tuesday, it made a deal to buy Wiz for$ 32 billion in cash, nearly$ 10 billion more than the proposed price in mid-2024.

Wiz will work for Google’s fog division, which is far from the company’s strong search division. Google is in opposition to . and a position in sky infrastructure that may challenge any administration’s ability to make a regulatory situation against a tie-up.

Under Lina Khan’s leadership, the Federal Trade Commission was infamously picky with regards to digital deals, violently scuttling talks in methods that both renowned Democrats like Reid Hoffman and Mark Cuban were both irritated by. As the technology sector evaluates how Trump 2.0 may address the sector that houses the six biggest U.S. companies by market value, Google’s pursuit of Wiz may be the first significant check for new FTC Chair Andrew Ferguson.

According to Brad Haller, senior partner for mergers and acquisitions at consulting company West Monroe,” It’s going to be a great litmus test and predictor for M&amp, A in 2025.” Because it is taking place fairly earlier in the year, it can be used as a gauge.

The deal would be a significant windfall for Silicon Valley venture capital firms, which have struggled to gain profits since the initial public offering market largely shut down in early 2022 and large M&amp, A fell into disrepute. According to an from PitchBook and the National Venture Capital Association, VC exit value dropped to$$ 81.2 % the following year and to$ 71.6 % in 2023, after peaking at$ 78 billion in 2021. The figure dropped five-quarters in the third quarter of 2024.

According to Haller,” Large acquisition strategy is back on the menu for VC-backed companies.”

Next to Sequoia Capital, Insight Partners, and Cyberstarts, Index Ventures is the largest outside investor in Wiz.

Assaf Rappaport, the co-founder of Wiz, left a deal with Google in July and wrote in a memo to employees that the business would instead pursue an IPO. As a result of the filings of the SEC’s prospectuses by artificial intelligence infrastructure company CoreWeave, digital health startup Hinge Health, and buy now, pay later lender Klarna, there are some indications that the IPO market is heating up.

The biggest headwind is economic uncertainty, as the government’s massive spending cuts and tariffs on top trading partners like China, Mexico, and Canada have caused extreme market volatility and raised concerns about business and consumer confidence. The Nasdaq is on track for its worst quarterly performance since 2022 and fifth straight weekly decline.

The potential regulatory risk is well worth the cost of Google’s purchase of Wiz. According to a source cited by Reuters, Wiz agreed to a termination fee of more than$ 3.2 billion, which the publication called “one of the highest fees in M&amp, A history.”

Google declined to comment.

After only 18 months, Wiz hit&nbsp was established in 2020, earning$ 100 million in annual recurring revenue. Prevention, active detection, and response are among the company’s cloud security products, and they’ve grown increasingly important as rapid advances in AI have made attacks more sophisticated and potentially more harmful.

According to Gordon Haskett analysts,” That price tag indicates that Google was almost desperate to boost its security bona fides before the adoption of AI gains even more speed.”

The increased role of AI and the adoption of cloud services have dramatically altered the security landscape for customers, according to Google’s on Tuesday announcing the agreement, “making cybersecurity increasingly important in defending against emergent risks and protecting national security.”

Rappaport stated in a for Wiz that” Being a part of Google Cloud is effectively strapping a rocket to our backs.”

Although the deal will face regulatory scrutiny,” Google would, in our opinion, have a stronger case than consumer-focused acquisitions,” according to Bank of America analysts in a note following the announcement. According to the company, Google holds fewer than 15 % of the cloud services market.

During the Biden administration, Google made the largest acquisition, purchasing cybersecurity firm Mandiant for$ 5.4 billion. Not just the search giant, which was also affected by the regulatory rigor, was the other Big Tech company.

In the middle of a 21-month legal battle, including an injunction attempt by the FTC, was required for Microsoft to ultimately close its$ 69 billion acquisition of video game publisher Activision Blizzard in late 2023. The organization also filed a lawsuit to stop Meta. acquisition of virtual reality company Within, though a California district court the FTC’s efforts.

Beyond the difficulties of making deals, Meta, and Both Amazon and Microsoft have been charged with monopolistic practices by the Justice Department and the FTC. In the case of Google, both organizations took legal steps.

In January, Khan told CNBC’s” Squawk Box” that she hoped the incoming Trump administration wouldn’t let Amazon and Meta be held accountable for pending antitrust lawsuits with a” sweetheart deal.” Following a number of tech executives and businesses, including Google, who pledged money to Trump’s inauguration fund, her comments came.

Ferguson has suggested that his FTC will keep an eye on technology, but he hasn’t provided much specifics. The president frequently criticized Amazon founder , notably for his ownership of The Washington Post, as well as taking aim at Meta and Google for their against his administration during Trump’s first administration, which was particularly hostile toward the sector.

After making visits to his Mar-a-Lago resort in Florida, those former foes have made additional efforts to alter the tone this time around.

Ferguson stated in a recent interview on” Squawk Box” that the administration’s” Big Tech is one of its main priorities.”

Ferguson remarked,” President Trump appointed me to protect Americans in the marketplace.” ” And I’ve said it from the beginning that Big Tech is one of our top priorities,” he continued.

On CNBC’s” Power Lunch,” former assistant attorney general for the Department of Justice’s antitrust division under Biden stated on Tuesday that a significant regulatory review is likely to be conducted in connection with the Google-Wiz deal. He claimed that it’s not just about the amount of data that Google controls, but also about its position in the cloud.

Kanter, who is now a CNBC contributor, said,” I don’t think the Wiz deal is going to ease on down the road to quick approval.” It’s going to be a long road, I tell you. They will need to examine a lot of documents and lots of data to determine whether it will truly bolster Google’s market position in many different markets.

This report was written by CNBC’s Jordan Novet and Samantha Subin.

Watch CNBC’s full interview with Andrew Ferguson, the FTC chair.