Perplexity AI’s Bold Move to Acquire Google Chrome

Perplexity AI, a rapidly growing AI startup, has made headlines with its unsolicited offer to purchase Google’s Chrome browser for a staggering $34.5 billion. This bid is nearly double Perplexity’s own valuation of $18 billion as of July. The company, led by Aravind Srinivas, has already secured commitments from several investors to finance this ambitious acquisition.

Commitments and Promises by Perplexity

The proposed acquisition includes maintaining the Chromium engine as open source and investing approximately $3 billion in its development. Additionally, Perplexity has assured that Google will continue to be the default search engine on Chrome, rather than replacing it with its own AI-powered search engine.

The Rationale Behind the Offer

The backdrop to this offer is a significant antitrust case won by the US Department of Justice (DOJ) against Google last year. The DOJ suggested that Google should divest Chrome, labeling it as “a critical search access point” that reinforces Google’s monopoly. The DOJ’s Initial Proposed Final Judgment requires Google to sell Chrome to remedy these competitive harms. Google, however, criticized this move as “wildly overbroad” and accused the DOJ of pursuing “a radical interventionist agenda.”

Potential Gains for Perplexity

This bid comes amid an intense generative AI competition, with tech giants like Meta and OpenAI investing heavily in AI talent and infrastructure. Acquiring Chrome would provide Perplexity with unparalleled access to users and search traffic, positioning it as a formidable competitor in the browser market against Google’s core search business.

Perplexity’s Previous Ambitions

This isn’t Perplexity’s first major strategic move. Earlier this year, the company considered merging with TikTok amidst political and legal uncertainties surrounding its US operations. Although that proposal is currently on hold, it highlights Perplexity’s aggressive expansion strategy.

Google’s Ongoing Antitrust Challenges

In addition to the Chrome divestiture proposal, Google is under scrutiny by the DOJ for potential antitrust violations related to its licensing agreement with Character.AI. This agreement granted Google a non-exclusive license to Character.AI’s language model technology and involved hiring its co-founders, both former Google employees. Despite these challenges, Google asserts it holds no ownership stake in Character.AI and remains cooperative with ongoing investigations.