AI Browser War: Perplexity’s Offer to Acquire Chrome
In Silicon Valley, there is a growing sentiment that Google is falling behind. In mid-August, Perplexity, an AI search unicorn, announced its intention to acquire Google's Chrome browser for $34.5 billion, nearly double Perplexity's own valuation. Previously, Perplexity had also expressed interest in acquiring TikTok. Is this browser acquisition battle merely hype, or is there a real possibility of a smaller entity overtaking a giant?
By the end of August, Anthropic released a new browser product, Claude for Chrome, joining the fray. With the burgeoning capabilities of the AI agent track, the term 'AI browser' has brought the once-overlooked 'browser' back into the spotlight in Silicon Valley.
Is the AI browser battle truly underway? What new opportunities does it suggest? How will the trillion-dollar search industry be disrupted?
This article discusses the new round of browser battles with Guru Chahal, a partner at Lightspeed Venture Partners, and Howie Xu, the Chief AI and Innovation Officer of Gen Digital.
In the last browser war, Firefox, Google Chrome, Microsoft Edge, Safari, and Opera were the main competitors. Their market shares have remained stable in recent years until the advent of AI.
What is an AI browser? Over the past 20 or 25 years, the way humans interact with computers has shifted from the operating system to the browser. Security, observability, data collection, and application execution now occur at the browser level.
The primary mechanism for AI to interact with tools designed for humans will also be the browser. The browser becomes an intriguing 'fortress' for data collection, task automation, and ensuring the security of AI-system interactions. This is an investment framework we believe in.
We have already invested in this field. As discussed with Howie, a few years ago, we saw promising teams working on enterprise browsers. Companies like Lightspeed are willing to use these browsers because IT and security teams can control what users can and cannot do in the browser.
We invested in Talon, later acquired by Palo Alto Networks, where we were the lead investor. We witnessed rapid market growth, and today it has become a large enterprise-browser market.
The core question today is whether AI can drive the birth and growth of a new browser category. This discussion is eagerly anticipated.