Perplexity AI has made a $34.5 billion unsolicited cash offer for Alphabet’s Chrome browser, which is considered a bold move despite being relatively low in value. This bid would require financing significantly exceeding what the startup is currently valued at.
Led by Aravind Srinivas, Perplexity is no stranger to ambitious proposals. Earlier this year, it attempted to merge with TikTok US to alleviate concerns regarding the app’s Chinese ownership.
Acquiring Chrome would give Perplexity access to over three billion users, potentially boosting its position in the competitive landscape of AI search, especially as regulatory scrutiny increases on Google.
Google has not responded to requests for comment and has no intentions of putting Chrome up for sale. The company is also preparing to challenge a U.S. court’s decision from last year, which labeled it as holding an illegal monopoly in online search. The Justice Department has recommended a divestiture of Chrome in relation to this case.
Perplexity did not specify its funding strategy for the offer. The company, which is three years old, has raised around $1 billion from backers that include Nvidia and Japan’s SoftBank, and it was last valued at $14 billion.
Reportedly, several funds are willing to support the acquisition financially, although their names were not disclosed.
As a new wave of users turn to chatbots like ChatGPT and Perplexity for information, traditional web browsers are becoming increasingly significant as key access points to search traffic and valuable user data, enhancing their relevance to big tech firms’ AI strategies.
Perplexity has already developed an AI browser called Comet, which can perform certain tasks on behalf of users. Owning Chrome could significantly strengthen its competitive stance against larger players like OpenAI, which has also shown interest in acquiring Chrome.
The offer includes commitments to keep the original browser code, known as Chromium, open source, invest $3 billion over two years, and maintain the current default search engine for Chrome, as noted in a term sheet reviewed by Reuters.
Perplexity asserts that its all-cash offer, free of any equity portion, would support user choice and reduce future competition concerns.
Analysts believe that Google is unlikely to accept the bid and would prefer to engage in extended legal battles to protect Chrome, essential to its AI initiatives, especially as it introduces features like AI-generated search summaries known as Overviews to maintain market share.
A ruling from a federal judge regarding remedies in the ongoing Google search antitrust case is anticipated later this month.
Perplexity’s offer is also lower than the $50 billion valuation suggested by DuckDuckGo’s CEO, indicating that Chrome might command a higher price if put on the market.
Interest in Chrome is not limited to OpenAI and Perplexity; Yahoo and private equity firm Apollo Global Management have also expressed their intentions to acquire it.
