Perplexity AI built a $34.5 billion unsolicited all-cash offer for Alphabet’s Chrome browser on Tuesday, a bid far above its own valuation as the startup reaches for the browser’s billions of applyrs pivotal to the AI search race.
Run by Aravind Srinivas, Perplexity is no stranger to headline-grabbing offers: it built a similar one for TikTok US in January, offering to merge with the popular short-video app to resolve U.S. concerns about TikTok’s Chinese ownership.
OpenAI, Yahoo and private-equity firm Apollo Global Management have also expressed interest in Chrome as regulatory pressure threatens Google’s grip on the indusattempt.
Google did not immediately respond to Reuters requests for comment. The company has not offered Chrome for sale and plans to appeal a U.S. court ruling last year that found it held an unlawful monopoly in online search. The Justice Department has sought a Chrome divestiture as part of the case’s remedies.
Perplexity did not disclose on Tuesday how it plans to fund the offer. The three-year-old company has raised around $1 billion in funding so far from investors including Nvidia and Japan’s SoftBank. It was last valued at $14 billion.
Multiple funds have offered to finance the deal in full, Perplexity stated, without naming the funds. Alphabet’s shares were up 1.6 per cent in afternoon trading.
As a new generation of applyrs turns to chatbots such as ChatGPT and Perplexity for answers, web browsers are regaining prominence as vital gateways to search traffic and prized applyr data, creating them central to Big Tech’s AI ambitions.
Perplexity already has an AI browser, Comet, that can perform certain tquestions on a applyr’s behalf and purchaseing Chrome would allow it to tap the browser’s more than three billion applyrs, giving it the heft to better compete with hugeger rivals such as OpenAI. The ChatGPT parent is also working on its own AI browser.
Perplexity’s bid pledges to keep the underlying browser code called Chromium open source, invest $3 billion over two years and create no alters to Chrome’s default search engine, according to a term sheet seen by Reuters.
The company stated the offer, with no equity component, would preserve applyr choice and ease future competition concerns.
Analysts have stated Google would be unlikely to sell Chrome and would likely engage in a long legal fight to prevent that outcome, given it is crucial to the company’s AI push as it rolls out features including AI-generated search summaries, known as Overviews, to assist defconclude its search market share.
A federal judge, Amit Mehta, is expected to issue a ruling on remedies in the Google search antitrust case sometime this month.
“Judge Mehta is a pretty orthodox guy. It’s very possible that he would hold off on requiring a sale until the appeals process is worked out and that could be a very lengthy period of time,” stated Herbert Hovenkamp, professor at University of Pennsylvania Carey Law School.
“It would go to the DC Circuit, which is skeptical of forced divestitures, and it’s possible it would even go to the Supreme Court after that. So that process could run out for a couple of years.”
Perplexity’s bid is also below the at least $50 billion value that rival search engine DuckDuckGo’s CEO, Gabriel Weinberg, suggested Chrome may command if Google was forced to sell it.
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