Perplexity AI offers $34.5 billion to acquire Google’s Chrome browser

New Delhi: Perplexity AI has made an unsolicited all-cash offer of $34.5 billion to acquire Alphabet’s Chrome browser, marking a bold move by the three-year-old startup in the highly competitive AI search market, according to Reuters.

The offer, announced on Tuesday, far exceeds Perplexity’s own valuation of $14 billion. The company, led by Aravind Srinivas, is known for high-profile bids, including an earlier proposal to merge with TikTok’s US operations to address national security concerns related to the short-video app’s Chinese ownership.

In addition to Perplexity, other entities such as OpenAI, Yahoo, and private-equity firm Apollo Global Management have expressed interest in acquiring Chrome, amid increasing regulatory scrutiny of Google’s dominance in online search. Google has not responded to requests for comment. The company has not put Chrome up for sale and is planning to appeal a US court ruling from last year that found it held an unlawful monopoly in the search market. The US Department of Justice is seeking a divestiture of Chrome as part of the remedies in the case.

Perplexity has not revealed how it intends to finance the $34.5 billion offer but said multiple investment funds have offered to fully finance the deal. The startup has raised approximately $1 billion in funding to date from backers including Nvidia and SoftBank.

With the rise of chatbots like ChatGPT and Perplexity itself, web browsers are gaining renewed importance as critical gateways to search traffic and valuable user data, positioning them at the centre of Big Tech’s AI strategies. 

Perplexity already operates an AI-powered browser called Comet, which can perform certain tasks autonomously for users. Acquiring Chrome, which has over three billion users, would provide Perplexity with the scale needed to compete with larger rivals, including OpenAI, which is reportedly developing its own AI browser.

According to a term sheet reviewed by Reuters, Perplexity has committed to maintaining Chromium, the underlying open-source browser code, and to investing $3 billion over two years. The offer also promises no changes to Chrome’s default search engine, aiming to preserve user choice and address potential competition concerns.

Industry analysts believe Google is unlikely to sell Chrome and would probably engage in prolonged legal proceedings to block the sale, given the browser’s strategic importance to Google’s AI developments. Google is currently rolling out AI-powered features, such as search summaries called Overviews, designed to reinforce its market share in search.

A federal judge, Amit Mehta, is expected to issue a ruling on remedies in the antitrust case against Google’s search business later this month.

Perplexity’s bid is notably lower than the valuation suggested by DuckDuckGo’s CEO, Gabriel Weinberg, who indicated Chrome could be worth at least $50 billion if Google were forced to sell.