Perplexity AI has offered to buy Google Chrome for $34.5 billion.
Multiple media outlets, including The Wall Street Journal, reported Tuesday that the AI search vendor made an offer nearly twice its own valuation of $18 billion, which it hit after securing $100 million in investments last month.
Perplexity co-founder and CEO Aravind Srinivas announced in March on LinkedIn that the company crossed $100 million in annualized revenue.
The bid comes as the U.S. Department of Justice pushes for Google to sell Chrome as part of its ruling that the search giant has an illegal monopoly over the internet search market.
"They're just reminding the world that Google may have to sell Chrome," said Nikhil Lai, an analyst at Forrester Research. He added that Perplexity has been putting pressure on Google to make its browser more conversational, and described this as another form of pressure -- especially given the bid is below what Chrome is worth. Many experts suggest the valuation is between $20 billion and $50 billion.
Lai said this is also not the first time Perplexity has tried to buy a company caught in the U.S. government's crosshairs: The vendor offered to buy TikTok earlier this year.
Google search and data
Perplexity's bid also reflects the current stage of the AI search market and speaks of Google's dominance, despite the shift to a more AI-based model.
"Nobody's really taken market share from Google yet," said Mark Beccue, an analyst at Omdia, a division of Informa TechTarget. He added that AI vendors such as OpenAI and Perplexity have not made a dent in Google's market share.
By buying Chrome, Perplexity would get a built-in market share of people who use Chrome not only as a web browser but also as the default browser on their smartphones -- as well as the data that comes with that market.
It's all about data and the value of data.
Bradley ShimminAnalyst, The Futurum Group
"It's all about data and the value of data," said Bradley Shimmin, an analyst at The Futurum Group. He added that the data consists of the browsing habits of users. "It's all about controlling and owning those routes to information and services for consumers."
Moreover, with the advertising model of search shifting as AI technology shifts, Chrome provides an opportunity for Perplexity.
"Perplexity wants to be that central hub for AI-fueled web experience," Shimmin said.
However, he added, there is a reason Google has maintained its lead in search and why the search market is so small.
Search requires a massive engineering scale, including handling advertisements, data privacy and online safety, which even Google has had difficulty maintaining.
"It will be very hard for Perplexity to jump to that scale," Shimmin said. On the other hand, if Perplexity's bid was accepted, the company would acquire not just the browser but also the engineering team that comes with it.
Still, if the search giant is ordered to sell Chrome, Google is likely to appeal the decision.
"It's an extremely valuable property for Google," Beccue said. "There's no real compulsion for them to sell it."
Esther Shittu is an Informa TechTarget news writer and podcast host covering artificial intelligence software and systems.
