WSJ What’s News - Can Perplexity’s Longshot Bid for Google Chrome Succeed?

Episode Date: August 12, 2025

P.M. Edition for Aug. 12. As Google awaits a judge’s ruling that could require it to spin off its Chrome browser, AI startup Perplexity makes an unsolicited $34.5 billion bid to buy Chrome. Journal reporter Katherine Blunt discusses what we know about the offer, and how likely it is to actually happen. Plus, President Trump calls for Goldman Sachs to replace its chief economist over his past predictions of the impact of tariffs. And the White House plans to review materials from the Smithsonian museums ahead of the country’s 250th anniversary. WSJ White House reporter Meridith McGraw explains why. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

President Trump calls for Goldman Sachs to replace its chief economist over his past predictions on the impact of tariffs. Plus, AI startup perplexity makes a bid for Google's Chrome browser. Can it succeed? And the White House's goal behind its review of the Smithsonian Museums. They've really focused on any narrative that they deem to be partisan or anything that downplays their idea of America. American exceptionalism. It's Tuesday, August 12th. I'm Alex O'Sillop for the Wall Street Journal. This is the PM edition of What's News,

the top headlines and business stories that move the world today. Let's start with the latest data on U.S. inflation. New data from the Labor Department out today showed that consumer prices were up 2.7% in July from a year earlier. That was unchanged from June's gain of 2.7% and, below the 2.8% rise that economists expected. But prices excluding food and energy categories, the so-called core measure economists watch in an effort to better capture inflation's underlying trend, rose 3.1% over the last 12 months, above forecasts for a 3% increase. For more on what this data means, I'm joined by WSJ economics reporter, Rachel Wolfe.

Rachel, tariffs have been around for six months. I know that a lot of economists were watching this data to see if tariffs are having an effect. What are we saying here? So in June, we started to see the first signs that tariffs were beginning to get passed onto consumers. We saw a little more of that in July. So in categories that have a lot of imports like furniture, tires, pet products, there were larger than normal increases last month. That being said, it wasn't consistent across the board. So some economists thought that apparel, for instance, would say.

see bigger price increases by now because we import a lot of clothes, but so far it has not gone up as much as economists predicted. And a reason why it could be that retailer is really stocked up in advance of tariffs. They might be sitting on a lot of supply. New car prices, same deal. What else could be driving prices up besides tariffs? So economists were looking at goods for this inflation report. They were really expecting to see increases concentrated. in stuff. But really what we ended up seeing was that services like airline tickets and medical services and car maintenance went up more than predicted. For instance, airline tickets were up 4%. And what economists think that that is tied to is that the job market is still pretty strong

and people are still spending money. And that means that it's not just tariffs having an effect. It's also people spending money. That was WSJ economics reporter Rachel Wolf. Thank you, Rachel. Thanks so much. The latest consumer price report made investors more confident that the Federal Reserve will cut short-term interest rates next month. Major U.S. indexes were up. The NASDAQ rose about 1.5%, hitting a new record, its 19th of the year. The S&P 500 added about 1.1%, notching its 16th record so far this year. The Dow also advanced 1.1%. President Trump appeared to call for Goldman Sachs CEO David Solomon to replace the bank's top economist over his past predictions. Posting on social media today, the president said that

Solomon should, quote, go out and get himself a new economist because the bank, he said, made a bad prediction a long time ago on the market and tariffs. The president asserted that tariffs haven't caused inflation or other issues. for the U.S. economy. Trump appears to be referring to Jan Hatzius, the bank's long-time chief economist, though he didn't call him out by name or title. Hatzius and his team have been among the many economists who have predicted tariff policies would dent labor markets, cause higher inflation, and slow U.S. economic growth. Trump also questioned whether Solomon himself should focus on just being a DJ, a reference to the bank chief's former

side gig. Goldman Sachs declined a comment on Trump's post. The White House didn't immediately respond to a request for comment. It's the president's latest broadside against executives he believes are undermining his goals. We're exclusively reporting that artificial intelligence startup perplexity has made an unsolicited offer to purchase Google's Chrome browser for $34.5 billion. Two subsidiaries of News Corp, parent of the journal, have sued perplexity. Catherine Blunt covers Google's parent alphabet for the journal and is here to tell us more about the offer. Catherine, perplexity is valued at about $18 billion.

So can it afford this $34.5 billion price tag? Excellent question, right? The company says that it has commitments from several large funds, including BC funds, to back the entirety of the transaction. We don't have any more detail than that at this point. But, yeah, it is significantly more than the current valuation of the company. It feels like not a coincidence that this unsolicited offer is coming at a time when Google Chrome might actually be spun off from the company, potentially. Last year, a U.S. District Judge ruled that Google illegally monopolized the search market and is expected to rule this month on how to restore competition. How does this offer fit in with this potential outcome?

Yeah, it's not a coincidence at all. The Justice Department filed a suit against Google in 2020, and it's taken quite a while to get to this remedies phase. of the trial. But the judge is considering a number of different options, considering limiting the company's ability to pay to be the default browser on phones and other devices, requiring it to share data with rivals. And as we're talking about now, potentially forcing a divestager of Chrome. The company doesn't want to do any of the proposed remedies, at least not with the sweep that's been proposed by the Justice Department. And in particular, said that like selling Chrome or having to share data with rivals would be really harmful.

to the overall business. A spokesperson for Google declined to comment on the offer, but how likely is a sale of Chrome to actually happen? Analysts have generally considered a forced sale of Chrome to be unlikely relative to the other potential remedies on the table. The judge did remark earlier this year during closing arguments of the trial that maybe this is a cleaner solution than some of the more complicated proposals on the table, but that doesn't really give us a great indication one way or the other how he's thinking

about it. The ruling should come within the next few weeks. he has said he expects to release a ruling in August. That was WSJ reporter, Catherine Blunt. Thank you, Catherine. Thanks for having me. Coming up, the White House vets the Smithsonian to ensure alignment with President Trump's view of American history.

More after the break. In an exclusive, we're reporting that the White House plans to conduct a far-reaching, review of Smithsonian Museum exhibitions, materials, and operations ahead of America's 250th anniversary to ensure the museums align with President Trump's interpretation of American history. That's according to a letter sent today by three top White House officials to Lonnie Bunch, the secretary of the Smithsonian Institution, and viewed by the Wall Street Journal. Meredith McGrath covers the White House for the journal and is here now with more. Meredith, what will this review entail?

So the White House is looking to do a pretty comprehensive review of everything from the little placards that are under exhibits in the Smithsonian Museums to how curators come up with the ideas for the exhibits or even grants and internal communication on their programming. And it's all part of the White House's goals to try to reshape and re-envision American history. especially ahead of the 250th anniversary next year. And so this team at the White House said that they're going to be going through their proposals. They asked the Smithsonian to tap representatives for each of their museums to work with them. And they're going to be doing walkthroughs of the current exhibits to take note of some of the themes and messaging and even connect some interviews with the curators as well to make sure that everybody's on the same page and that they're mostly reflecting this executive order that the White House issued to, quote, restore truth

and sanity to American history. And they've really focused on any sort of narrative that they deem to be partisan or anything that downplays their idea of American exceptionalism. What is the Trump administration's goal with this review? President Trump has really tried to put his own touch on. some of the country's cultural institutions, and that ranges from big universities to some of these museums. And the president really is focused on putting American history in a positive light and honed in on anything that they say has political influence or bias. What does the Smithsonian have to say about it?

So far, the Smithsonian hasn't had a response to the letter, but we know that Lonnie Bunch has been in contact with White House officials and has given them tours of the museums. And Vice President J.D. Vance is among those who's on the Board of Regents that agreed to conduct reviews of some of the museums earlier this year. And what happens next? Is there a timeline for this review? The letter pretty clearly outlines within the next 30 days, 75 days, 120 days, what their expectations are for the different museums in terms of the materials that they need to hand over to the White House for review or the materials that they need to come up with to celebrate the 250th anniversary,

some of the messaging or programming around that. And the letter said that they hope to wrap up all of this in time for celebrations to begin in 2026. That was WSJ reporter, Meredith McGrath. Thanks, Meredith. Thank you. And finally, Harvard University is nearing a $500 million settlement with the Trump administration. If it does happen, it would be the largest payout the White House has won so far in its campaign to punish universities that it says failed to stop anti-Semitism on campus. A person familiar with the negotiations said that under the terms of the deal, which isn't final, the university would pay $500 million to workforce and vocational programs, not to the federal government.

In turn, the Trump administration would restore billions in frozen federal dollars to the school for research and other programs. The administration wouldn't appoint a monitor to oversee Harvard's compliance with the deal. The university would pledge to continue to abide by federal regulations around merit-based hiring and admissions, as well as protecting student civil rights. An agreement with Harvard isn't finalized, and negotiations are continuing this week. President Trump has attacked Harvard repeatedly in the past few months and would need to approve a final. deal. Harvard declined to comment. And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre Bienname, with supervising producer Michael Cosmedes. I'm Alex Oslov for the Wall Street Journal. We'll be back with a new show tomorrow morning.

Thanks for listening.