AI Startup Perplexity Makes Bold $34.5 Billion Bid for Google's Chrome Browser Amid Google's Antitrust Suit Loss

TradingKey - Perplexity, a rising star in the AI startup world, has made a bold $34.5 billion bid to acquire Google's Chrome browser. The proposal was submitted to Google on Tuesday morning, August 12. Earlier in April, another AI frontrunner, OpenAI, also expressed interest in purchasing Chrome.

These acquisition overtures are strategic moves to anticipate a potential situation where Google might be compelled to divest Chrome due to antitrust litigation. Since 2020, Google has been embroiled in an antitrust suit brought by the U.S. Department of Justice (DOJ).

Last year, the DOJ secured a victory in court, determining that Google illegally maintained its monopoly over search engines. Remedial measures are expected to be announced this month. To restore competition in the search engine market and diminish Google's dominance, a judge has considered strategies such as forcing Google to sell Chrome, prohibiting or limiting Google's payments to partners like Apple to be the default search engine, or requiring Google to share data with competitors.

Google has declined to comment on Perplexity's bid, emphasizing its intention to appeal the ruling and proposing milder remedies than selling Chrome, such as amending exclusive agreements with Apple, Mozilla, and Android to allow more competition.

Many view Perplexity's acquisition as unlikely. Analysts at Baird argue that Perplexity's bid significantly undervalues Chrome, estimating its market value to be close to $100 billion, while Perplexity itself is valued at only $18 billion. They believe that forced divestiture is improbable, as it could diminish product quality and reliability, ultimately harming users; additionally, separating Chrome from the Google platform poses certain complexities. The market sentiment aligns, with a mere 8% probability of Perplexity's acquisition of Chrome on the betting platform Polymarket.

Polymarket Users Bet on Perplexity's Acquisition of Chrome, Source: Polymarket

Despite Perplexity's move appearing more like a publicity stunt, the undeniable fact remains that AI browsers are on the rise with unstoppable momentum, and a day may soon come when they pose a real threat to Google's Chrome.

As a leading name in the AI search sector, Perplexity recently launched the AI browser Comet, which offers a completely different user experience from traditional browsers. Analysts believe this could fundamentally change users' internet habits and help the company directly engage with users, gaining access to the user data that underpins Google's success, thereby establishing an edge in search and content recommendations. Although Google commands over two-thirds of the global browser market, this move could still potentially disrupt Google's supremacy.

Year-to-date, Google's stock (GOOG) (GOOGL) has risen about 7%, underperforming compared to the S&P 500 and Nasdaq indices.