Wiz, a cloud security startup, has decided to forgo a $23 billion acquisition deal with Google's parent company Alphabet Inc. (NASDAQ:GOOGL), (NASDAQ:GOOG) and will instead focus on an initial public offering.

What Happened: The acquisition, which would have been Google's largest, was called off due to antitrust and investor concerns, according to a CNBC report on Monday.

"Saying no to such humbling offers is tough," Wiz co-founder Assaf Rappaport informed employees of the decision in a memo, emphasizing the company's commitment to its pre-existing goals, including an IPO and reaching $1 billion in annual recurring revenue. The report cited a person familiar with the company's thinking.

The deal would have nearly doubled Wiz's $12 billion valuation from its most recent funding round. The startup, founded in 2020, has experienced rapid growth under Rappaport's leadership.

Wiz's cloud security products, which include prevention, active detection, and response, have attracted significant interest from large firms and would have bolstered Google's competition with Microsoft Corp, which also offers security software.

Alphabet's cloud division, which has been facing strong competition from Microsoft and Amazon.com, Inc., reached profitability in 2023 after years of substantial investment.

Wiz and Google did not immediately respond to Benzinga's request for comment.

Why It Matters: The potential acquisition of Wiz by Google was first reported in mid-July, with analysts predicting that this deal could set the stage for a significant shift in the Big Tech M&A landscape. The acquisition was seen as a strategic move that could enhance Google's cloud security capabilities and help it compete with major rivals such as Amazon and Microsoft.

However, the collapse of this deal reflects the current climate, where exits in the technology industry have been rare. Startups are waiting for more receptive markets before going public, and cash-rich companies are wary of not winning regulatory clearance for transactions.

Price Action: Alphabet Inc Class A stock closed at $181.67 today, up 2.26%. In after-hours trading, the stock increased by 0.14%. Year to date, Alphabet Inc Class A has risen by 31.48%. Meanwhile, Alphabet Inc Class C stock closed at $183.35 today, up 2.21%. In after-hours trading, the stock gained 0.11%, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote