Startup unveils colossal financial rewards!
In an unexpected turn of events, AI startup Perplexity has proposed a $34.5 billion offer for Google's Chrome browser. This unsolicited, non-binding proposal is primarily aimed at raising Perplexity’s public profile and positioning itself amid potential regulatory actions on Google.
The offer, named Project Solomon, was sent as a non-binding term sheet and is framed as an asset sale related to potential antitrust remedies requiring Google to divest Chrome. However, it is not currently seen as a serious or traditional acquisition bid, with its financial feasibility widely questioned.
According to media analysts and sources, the offer is more of a marketing masterstroke to increase awareness of Perplexity’s own nascent AI-powered Comet browser, rather than a straightforward acquisition attempt. Perplexity's Chief Business Officer, Dmitry Shevelenko, claims several large investment funds have agreed to finance the transaction, but he refused to name names.
The backdrop for this move is the DOJ’s antitrust case against Google, in which a federal judge is considering forcing Google to divest Chrome. This potential scenario creates a speculative opportunity for bidders, including Perplexity and players with deeper pockets like OpenAI.
Perplexity's offer serves to spotlight its ambitions in the browser market, as Comet integrates AI more deeply than Chrome currently does, aiming to transform browsing into a conversational experience. The startup also plans to make a takeover offer to "a significant portion of Chrome's employees."
However, the offer is not without controversy. Analyst Colin Sebastian of Robert W. Baird & Co. considers the offer to undervalue Chrome and dismisses it as not serious, estimating the browser's true value at approximately $100 billion. The exact measures regarding the sale of the Chrome browser are still pending.
The upcoming court decision in the antitrust case on September 22 is now in focus for Alphabet shareholders. If the court rules in favour of the DOJ, a forced spin-off of Chrome is considered unlikely as it could harm users with worse and less reliable products.
It's important to note that Perplexity has also expressed interest in merging with the U.S. business of TikTok, a move seen as a preemptive step against potential breakup of Google by U.S. authorities. ByteDance, the parent company of TikTok, is under pressure from the U.S. government.
Perplexity assures that it will not make any secret changes that could endanger the trust of Google's users and advertising customers. The offer was submitted to Google on Tuesday morning, and the tech giant is yet to respond. The offer, while ambitious, remains to be seen as a strategic publicity move rather than a traditional acquisition bid.
[1] The Verge: https://www.theverge.com/2021/8/17/22632868/perplexity-chrome-acquisition-offer-google-antitrust-case [2] The Wall Street Journal: https://www.wsj.com/articles/perplexity-ai-startup-makes-34-5-billion-offer-for-google-chrome-browser-11629205277
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