Google Faces $34.5B Chrome Bid from Perplexity Amid Antitrust Breakup Threat

Google is confronting a dramatic challenge to its dominance as AI-powered search startup Perplexity has offered $34.5 billion to acquire the Chrome browser, just weeks before a judge is set to rule on possible antitrust-driven divestitures. The bid — the first public and specific attempt by an outside company to carve out a core Google asset — comes as regulators push for remedies following a 2024 ruling that found Google held a monopoly in search. The U.S. Department of Justice (DOJ) has suggested that separating Chrome from Google could create a more level playing field for competitors.

Although analysts are skeptical about the bid’s chances, the offer underscores growing pressure on Google and parent company Alphabet as they face heightened scrutiny from both U.S. and EU regulators. Barclays estimates Chrome generates roughly 35% of Google’s search revenue, while rival DuckDuckGo’s CEO Gabriel Weinberg has valued the browser as high as $50 billion. Any forced sale could lead to a stock drop of up to 25%, according to some market forecasts. Perplexity’s valuation of $18 billion is far below its proposed purchase price, and it has not disclosed the backers who would finance the deal.

The timing is critical, as Alphabet juggles regulatory threats with major investments in artificial intelligence. The tech giant has been spending tens of billions annually to expand AI infrastructure and services while contending with shifting user behavior toward AI-driven tools like ChatGPT. Despite diversifying into businesses like Google Cloud and YouTube, Alphabet still relies heavily on search advertising, which could be disrupted if Chrome were spun off.

Alphabet’s other divisions hold massive valuations that highlight the stakes of any breakup. Analysts peg Google Cloud’s worth between $549 billion and $682 billion, while YouTube’s valuation ranges from $271 billion to $550 billion. These units have become crucial growth engines, with Google Cloud turning profitable in 2023 and YouTube surpassing Netflix in engagement. However, analysts at D.A. Davidson have argued that a full breakup could ultimately benefit shareholders by allowing them to invest directly in high-performing segments.

As the remedies decision looms, Alphabet CEO Sundar Pichai faces the most consequential moment of his tenure. Since taking over from co-founder Larry Page in 2019, Pichai has led Alphabet’s market cap to a $2.5 trillion valuation. But with regulators circling and rivals like Perplexity making bold moves, the future of Chrome — and potentially Google’s entire corporate structure — hangs in the balance.

Source: CNBC