Perplexity's $34.5B Chrome Bid: Stunt or Antitrust Play?
AI startup Perplexity has made a surprising $34.5 billion offer to acquire Google’s Chrome browser, a move that appears less aimed at Google/Alphabet directly and more at influencing a federal judge presiding over a critical antitrust case. The audacious proposal has undoubtedly captured significant attention, which may well have been Perplexity’s primary objective.
In a letter sent from Perplexity CEO Aravind Srinivas to Sundar Pichai, CEO of both Alphabet and Google, Perplexity outlined its commitment to maintaining Google as Chrome’s default search engine, while acknowledging users’ ability to change this setting. The company also pledged to continue supporting and promoting Chromium, the open-source project that forms Chrome’s foundation, stating its intention for this commitment to be legally binding, pending regulatory approval. Furthermore, Perplexity promised a substantial investment of $3 billion over two years to enhance Chrome’s reliability, performance, security, and customer support infrastructure. It also committed to pursuing appropriate security certifications, maintaining a quarterly customer-facing roadmap, and establishing an Open Web Advisory Board within 120 days of a potential acquisition. While the offer did not guarantee retention of all Chrome employees, it indicated that Perplexity would extend offers to a significant portion of key personnel and implement programs to preserve expertise and continuity. The letter explicitly framed the proposal as an antitrust remedy, designed to place Chrome under a “capable, independent operator focused on continuity, openness, and consumer protection,” thereby serving the public interest.
This offer unfolds against the backdrop of a high-stakes federal court case, which is widely seen as the sole catalyst for Perplexity’s bid. US District Court Judge Amit Mehta is currently deliberating on potential remedies in a lawsuit challenging Google’s alleged monopolistic control over web search, with the possibility of ordering the divestiture of certain Google units.
Analysts hold mixed views on the implications of Perplexity’s move. Jason Andersen, a VP and principal analyst with Moor Insights & Strategy, leans towards labeling it a “marketing stunt.” He suggests that after a period of relative quiet, Perplexity is leveraging this high-profile action to regain public visibility amidst fierce competition in the AI space. Conversely, Brian Jackson, a principal research director at Info-Tech Research Group, views the timing as a stroke of “genius.” Jackson believes the offer, coming just before Judge Mehta’s decision, could present Google with an alternative to an unfavorable judicial ruling by transferring Chrome to a neutral third party.
Financial feasibility also raises questions. Doubts linger over Perplexity’s ability to justify a $34.5 billion expenditure on a browser, especially given the ease with which users might abandon Chrome if its integration with Google’s ecosystem is severed. Jackson, however, considers the price tag too low, estimating Chrome’s fair market value to be at least twice Perplexity’s offer. Notably, Google did not initially report the offer to the United States Securities and Exchange Commission (SEC), likely because, given Alphabet’s $350 billion in annual revenue last year, the offer was not considered “material” enough to warrant immediate disclosure.
A significant challenge in any potential acquisition lies in Chrome’s deep integration with a multitude of Google services, including Gmail, Google Docs, Google Drive, and YouTube. While Perplexity has committed to retaining Google as the default search engine, the letter does not address the fate of these seamless integrations. Perplexity might seek to integrate its own services, but doing so could risk alienating Chrome’s user base, who, as users of a free browser, have no financial incentive to remain if the value proposition diminishes. Conversely, Google might permit these integrations to persist, even post-divestiture, as they generate significant revenue. As Jackson noted, “a lot of the entrenched value is in the [Google apps] integration.”
Andersen highlighted Perplexity’s recent “Comet” extension for Chrome, which enables AI interaction within the browser, as a potential explanation for Perplexity’s interest. While Andersen found Comet to be somewhat slow and unimpressive in early testing, he suggested that acquiring Chrome would grant Perplexity direct access and control over the browser’s source code, allowing them to address such performance issues. He also pointed out that Perplexity, with its limited services, might welcome maintaining Google’s extensive app integrations, whereas Google has hundreds of services to plug into Chrome.
Looking ahead, Andersen speculated on an alternative path should the judge order Google to divest Chrome. He believes Google’s parent company, Alphabet, might simply shift Chrome to another internal division and strictly wall it off to comply with the court’s concerns, akin to how financial firms isolate sensitive business units. “If they lose [in court], they are not going to sell it,” Andersen asserted. He also raised concerns about hardware implications, noting that Chrome effectively serves as the operating system for Chromebooks, with potential extensions to the Android phone community. The Perplexity offer, therefore, is not merely a transaction, but a strategic maneuver in a complex, high-stakes legal and technological battle.