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Will AI Power a New Search King? Perplexity Makes Longshot $34.5 Billion Offer for Chrome (Wall Street Journal) 

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Artificial-intelligence startup Perplexity on Tuesday offered to purchase Google’s Chrome browser for $34.5 billion as it works to challenge the tech giant’s web-search dominance.

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Perplexity’s offer is significantly more than its own valuation, which is estimated at $18 billion. The company told The Wall Street Journal that several investors including large venture-capital funds had agreed to back the transaction in full.

Trade Deal Risks.

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Will US Courts Step In On Trade Pay-to-Play? Trump Bid for Cut of Chip Revenue Risks ‘Dangerous World’ (Bloomberg) 

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The chip-payment arrangement, in which Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay the US government 15% of revenue from some chip sales to China, may face legal challenges because it could be construed as an export tax, something that’s not allowed under the constitution, trade experts said. 

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As outlined in Ben Thompson's newsletter, 'Statechery': During the Constitutional Convention southern states, whose economies were heavily dependent on international exports, were concerned that a federal government, dominated by the north, would seek to fund itself on the back of those exports; that’s why Article I, Section 9, Clause 5 states:

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No Tax or Duty shall be laid on Articles exported from any State. 

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Thompson continues, "The Supreme Court has allowed very limited exceptions to this clause: there can be a broad-based tax that happens to cover exports (like, say, a corporate income tax), but not taxes specifically focused on exports or explicitly export-oriented activities, and there can be user fees (like, say, harbor duties), but those fees cannot be ad valorem — i.e. in proportion to the value of the goods in question. An import tax specifically targeted at to-be-exported goods is also unconstitutional. In short, of all of the Trump tariff decisions, this is the most likely to ultimately be struck down.

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"Then again, someone needs to actually make the case to have this overturned, which, presumably, would be Nvidia or AMD. Given they want an export license, it’s possible they simply decline to sue, and it’s not clear who else might have standing; perhaps Nvidia or AMD shareholders? In other words, if Nvidia and AMD ultimately don’t object to this 15% (because access to the Chinese market is more important to them), it might stand, at least for a while."

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Chips Trade Deal Hits Speed Bump: China Urges Firms to Avoid Nvidia H20 Chips After Trump Resumes Sales (Bloomberg) 

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Beijing has urged local companies to avoid using Nvidia Corp.’s H20 processors, particularly for government-related purposes, complicating the chipmaker’s attempts to recoup billions in lost China revenue after the Trump administration reversed an effective US ban on such sales.

What I'm Reading.

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Accelerating Inflation: US Core Consumer Price Index Picks Up 0.3% on Services; Markets Bet Fed May Resume Cutting Rates (Bloomberg) 

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Underlying US inflation accelerated in July by the most since the start of the year, a potential sign that businesses are passing along tariff-related costs to customers, as reported in the New York Times.

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The CPI data give ammunition to those betting the Fed has cover to resume cutting as soon as next month.

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Here is the BLS chart showing the Core CPI's acceleration:

Tariffs Not Solving Fiscal Challenges: US July Tariff Revenue Jump Fails to Halt Wider Budget Gap (Bloomberg) 

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Customs duties climbed to $28 billion last month, marking a 273% surge over July last year, a Treasury Department release showed on Tuesday. At the same time, the monthly budget deficit came in at $291 billion, or 10% more than the same month a year before, after accounting for calendar differences.

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Wall Street's New Fear: There's No Good Replacement for Government Data (Axios) 

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The U.S. government produces some of the world's premiere economic data. The future of those indicators looks murkier than ever, with no private sector source readily available to replace them.

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At the end of the day all roads lead back to the government data," Mark Zandi, chief economist at Moody's Analytics, tells Axios. "If we don't have that data, we're going to be lost."

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You Can't Spell 'Immigration' Without AI: America’s New AI Plan Is Great. There’s Just One Problem. (Editorial Board - Bloomberg Opinion) 

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Building on this plan, and fixing its flaws, will fall mainly to Congress. Lawmakers need to make a concerted effort to modernize the electrical grid and streamline energy projects with AI in mind. They should revive a bipartisan permitting-reform effort, increase research funding for foundational models and reconsider a plan (recently dropped) to preempt state AI laws.

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Crucially, they should also boost visas for workers with in-demand STEM skills and exempt foreigners who graduate from US schools with advanced science degrees from the cap on green-card allotments. 

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Ukraine-Russia Latest: Zelenskiy Says Ukraine Won’t Give Up Donbas Region to Russia (Bloomberg) 

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Vladimir Putin is demanding that Ukraine give up Donetsk and Luhansk regions that together form the Donbas, as a condition to unlock a ceasefire and enter negotiations over a longer-term peace accord.

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But such a decision would require Zelenskiy to order troops withdrawal from 9,000 square kilometers (3,474 square miles) of Donetsk region, handing Moscow a victory that its army couldn’t achieve militarily for more than a decade.

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'Everything Is At Stake': Inside Science Labs Trying to Survive in the Trump Era (Washington Post) 

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With stunning speed, the Trump administration has over the past six months cut research dollars, terminated grants and hit the brakes on federal funding, destabilizing an 80-year-old partnership between the government and universities that has made the United States a scientific superpower.

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Latest Arts Push: White House Announces Comprehensive Review of Smithsonian Exhibitions (New York Times) 

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Museums will be required to adjust any content that the administration finds problematic within 120 days, the letter said, “replacing divisive or ideologically driven language with unifying, historically accurate and constructive descriptions.”

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The review, which will begin with eight of the Smithsonian’s 21 museums, is the latest attempt by Donald Trump to try to impose his will on the Smithsonian, which has traditionally operated as an independent institution that regards itself outside the purview of the executive branch.

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Don't Miss Today's Daily Read Podcast: Click here to listen to the latest episode of the AI-generated companion of today's newsletter on Spotify. It's also available on Apple Podcasts .  Take a listen today.

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Must-Experience Exhibition in London: Giuseppe Penone: Thoughts in the Roots (Serpentine Galleries) 

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'Thoughts in the Roots,' Giuseppe Penone's "evocative," "ecstatic" exhibition, brings together works from 1969 to the present, illustrating Penone’s enduring fascination with the interplay between organic and artistic processes. According to The London Standard, “This is an exhibition that is very much alive, and demands return visits over what will be a blazing few months.” 

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You have until September 7 to experience the exhibition, which has created an "ecstatic realm where trees and humans merge." As Penone has said, "A tree's body is itself a sculpture." Download the Bloomberg Connects app for the free digital guide. And click the photo below to watch the exhibition video and hear from the legendary artist.

Best of Late Night.

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On Donald Trump federalizing the DC police:

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“But I mean, the man’s got a point. D.C. can be a very, very dangerous place. I remember on Jan. 6, 2021, when someone told an angry mob to get their steps in by storming the Capitol, and that someone was the president.”

— Nicole Byer, guest host of "Jimmy Kimmel Live"

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On Donald Trump and Vladimir Putin's plan to meet in Alaska on Friday:

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“Trump loves talking about keeping criminal foreigners out of the country, and now he’s like,‘Vladimir Putin, come on over. Come on, stay with me if you want.’”

— Jimmy Fallon

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“Putin has come all the way to the U.S. to meet with Trump. He was like, ‘Oh, this could’ve been a hacked email.’”

— Jimmy Fallon

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“If you’re wondering why Alaska, it’s the only way [Putin] would wear a shirt.”

— Seth Meyers

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And from The Late Show with Stephen Colbert: Stephen shows off his acting chops with a new character satirizing the Vice President's recent taxpayer-funded excursion: "Widdle Pwince Vance." Click the photo below to watch.