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Perplexity has made an unsolicited $34.5bn offer for Google’s Chrome, as the artificial intelligence start-up positions itself as a bidder should a US court force the search giant to sell the web browser.
In a letter sent on Tuesday to Sundar Pichai, chief executive of Google parent Alphabet, Perplexity co-founder Aravind Srinivas said the offer is “designed to satisfy an antitrust remedy by placing Chrome with a capable, independent operator”.
Perplexity, whose AI search tool is a rival to Google’s core product, made a similarly high-profile offer to buy TikTok for a reported $50bn earlier this year — which has not come to anything.
For Chrome, Perplexity claims “multiple large venture capital funds have agreed to finance the all-cash transaction in full”, but refused to name them. The value of the offer is almost double the start-up’s $18bn valuation.
Jesse Dwyer, head of communications at Perplexity, told the Financial Times: “This isn’t a joke. We are good at this. We know we would be good stewards of Chrome and we would challenge anybody who says they would be a better one.”
Alphabet declined to comment. A person familiar with the internal deliberations said the company did not view it as a serious offer.
After losing a competition lawsuit over its dominance of online search, Google is bracing for a federal court to determine the so-called remedies this month.
The most dramatic decision could include forcing the company to sell Chrome, which the US Department of Justice argues is necessary to break its illegal monopoly.
Last year, judge Amit Mehta ruled Google maintained its stranglehold on online search by spending billions of dollars on exclusive deals with wireless carriers, browser developers and device manufacturers, in particular Apple. Alphabet could also be made to share more data with rivals to help them build viable alternatives to its search engine, which controls almost 90 per cent of the market.
However, Google has vowed to appeal against the remedies and could stretch out the timeline for a Chrome divestment for years. Pichai testified the DoJ’s requests are “far-reaching” and “extraordinary”, present security risks for user data and amount to forcing the company to give away its intellectual property for free.
Although much smaller and just three years old, Perplexity has emerged as a thorn in Google’s side, with its app surging in popularity on Android and Apple stores. Backed by SoftBank, Nvidia and Amazon founder Jeff Bezos, Perplexity claims 30mn active users and more than 780mn monthly queries versus 13.7bn daily searches on Google. Alphabet’s share price dropped in May when an Apple executive said it was in talks to offer Perplexity as an alternative default option on its iPhones and that the number of Google searches had fallen on its Safari browser for the first time in decades.
Google has started to offer “AI Mode” through its search engine that provides answers instead of its traditional list of links. Srinivas, a former Google intern, has needled his larger competitor on social media. He generated headlines with the long-shot proposal to buy TikTok to solve questions about its Chinese ownership — despite the deeper-pocketed players circling the video app.
Chrome is the most widely used browser in the world and would attract numerous bidders should Google be required to sell. An OpenAI executive has testified that the ChatGPT maker would also be interested in buying the browser. Rivals are also interested in acquiring Chromium as part of a deal, the open-source software on which many browsers are built, including Microsoft Edge.
Srinivas also made commitments in the letter to keep Chromium open-source, leave Google as the default search option, retain most of its staff and invest $3bn over two years. Last month, Perplexity launched an AI native web browser called Comet that runs on the Chromium platform, which can act as an agent on users’ behalf, following voice and text commands to perform tasks such as shopping, summarising social media feeds and sending emails.
