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Perplexity AI offers to buy Google's Chrome
Aravind Srinivas-led Perplexity AI has made a $34.5 billion unsolicited all-cash offer for Alphabet's Chrome browser, despite being valued at just $14 billion.
Why Perplexity makes $34.5 billion offer to buy Chrome?
Interestingly, Perplexity's bid comes amid increasing regulatory pressure on Alphabet, with US authorities seeking a potential Chrome divestiture due to antitrust concerns.
According to the Economic Times, a ruling by US District Court Judge Amit Mehta in the antitrust case against Google is expected soon, and may well force the tech giant to sell the Chrome browser. The decision is part of efforts to address Google's unlawful monopoly in online search. The Justice Department has asked for a Chrome divestiture as part of the case's remedies.
As reported by The New York Times, Perplexity CEO Aravind Srinivas wrote to Sundar Pichai, CEO of Alphabet, stating that the offer was "designed to satisfy an antitrust remedy in highest public interest by placing Chrome with a capable, independent operator focused on continuity, openness, and consumer protection".
Perplexity made a similar offer to merge with TikTok US in January, amid U.S. concerns about the popular short-video app's Chinese ownership.
Buying Chrome would help the AI startup to tap the browser's more than three billion users for an edge in the artificial intelligence search race, as regulatory pressure threatens Google's hold on the industry.
Google did not immediately respond to a Reuters request for comment.
Meanwhile, Perplexity AI did not reveal its plans to fund the $34.5 billion offer.
Perplexity plans to fund the deal
The three-year-old AI startup has raised around $1 billion in funding so far from investors, including Nvidia and Japan's SoftBank. The firm was last valued at $14 billion.
Multiple funds have reportedly offered to finance the deal in full, a person familiar with the matter told Reuters without naming the funds.
Perplexity’s AI browser, Comet, can perform certain tasks on a user's behalf and acquiring Chrome would help it compete against bigger rivals such as OpenAI.
OpenAI has also earlier expressed interest in buying Chrome while working on its own AI browser.
Perplexity's bid pledges to keep the underlying browser code called Chromium open source, invest $3 billion over two years without making any changes to Chrome's default search engine, according to a term sheet verified by Reuters.