RBC says OpenAI would be prepared to pay more in auction scenario for Chrome

RBC Capital analyst Brad Erickson notes that according to an unconfirmed Wall Street Journal article, Perplexity reportedly has submitted a bid to Alphabet (GOOG) (GOOGL) to buy Chrome for $34.5B and positioned the deal as a way to provide a remedy to Google’s Search case that it lost earlier this year. The proposed price is nearly 2-times the company’s last valuation but it has reportedly secured access to the necessary financing from VCs. The judge’s decision on what remedies will be mandated for Google is expected at any point here in August. The firm believes the judge is fully aware there are willing and able buyers – one in particular with a valuation of more than 15-times that of Perplexity. RBC has felt for some time that the browser would be critical to ramping distribution for competing horizontal GenAI applications and thus, relative to a $34.5B bid, it would think OpenAI potentially would be prepared to pay significantly more for it in an auction scenario given the value unlock. The firm has an Outperform rating on Alphabet with a price target of $220.