Google faces potential breakup as Perplexity's $34.5 billion bid for Chrome adds urgency to looming antitrust decision

Perplexity AI’s surprise $34.5 billion bid to acquire Google’s Chrome browser has added unexpected drama to the looming antitrust decision facing Alphabet. The offer, made just days before Google’s 20th anniversary since its IPO, marks the first time an external company has publicly proposed buying a core component of Google’s business. While analysts largely dismiss the bid as symbolic or strategic rather than serious, it underscores the growing pressure on Google to address its dominant market position. The U.S. Department of Justice won a landmark antitrust case in 2023, ruling that Google maintained an illegal monopoly in online search by bundling its search engine with the Chrome browser and preinstalling it on devices like Chromebooks. The DOJ has since recommended a breakup of Google as a remedy, specifically calling for the divestiture of Chrome to level the playing field for competitors. Google has strongly opposed the move, with Legal Chief Kent Walker calling the proposal an “unprecedented government overreach” that could undermine U.S. technological leadership. With the judge’s final decision expected imminently, investors are now weighing the potential impact on Alphabet’s future value. Despite the risks, Alphabet continues to invest heavily in AI, spending tens of billions annually on infrastructure and services. At the same time, traditional search usage is declining as users turn to AI-powered tools like ChatGPT for instant answers. Still, search ads remain the backbone of Alphabet’s revenue. Analysts have begun assigning values to Alphabet’s major divisions, partly in anticipation of a possible breakup. Chrome, while not directly profitable, is central to Google’s ad ecosystem. It drives an estimated 35% of search revenue and has 2.25 billion users. Barclays views a Chrome divestiture as a “black swan” event that could knock 15% to 25% off Alphabet’s stock. Raymond James values Chrome at $50 billion, aligning with estimates from DuckDuckGo CEO Gabriel Weinberg, who said the browser could be worth up to $50 billion if sold. Google Cloud, now profitable and growing rapidly, is seen as one of the company’s most valuable assets. In Q2 2025, it reported $2.8 billion in operating profit on $13.6 billion in revenue, with a $106 billion backlog. Analysts at Wedbush, TD Cowen, and D.A. Davidson value the unit between $549 billion and $682 billion, citing its strong AI infrastructure and faster growth than AWS. YouTube, acquired in 2006 for $1.65 billion, continues to grow, with ad revenue rising 13% to $9.8 billion in Q2. It now surpasses Netflix in audience engagement and is the second-largest media company by revenue. Valuations range from $271 billion (TD Cowen) to $550 billion (MoffettNathanson), with some analysts calling it the “new king of all media.” Waymo, Alphabet’s self-driving unit, is the most high-profile of its “Other Bets.” With over 1,500 autonomous vehicles and more than 100 million driverless miles logged, it leads in commercial deployment. Though still unprofitable, Waymo’s latest funding round valued it at $45 billion. Analysts now see far higher potential—D.A. Davidson estimates $200 billion or more, while Oppenheimer sees $300 billion based on future earnings projections. Raymond James values it at $150 billion. With the DOJ’s decision on the horizon, Alphabet’s future is at a crossroads. The Perplexity bid, while unlikely to materialize, has spotlighted the intense scrutiny and high stakes surrounding Google’s dominance—and the potential for a major structural shift in the tech landscape.