What's up: AI startup Perplexity makes a bid for Google Chrome; Musk vs. OpenAI on the App Store; China's open-source AI lead

Good morning. Neural networks aren’t the only game in artificial intelligence, but you’d be forgiven for thinking otherwise after the hot streak sparked by ChatGPT’s arrival in 2022.

That model’s abilities, shocking at the time and bracing even now, set off a fundraising, spending and development binge that has largely eclipsed a neural-network alternative known as symbolic reasoning. Instead of the statistical, data-driven processes of neural networks, it uses logic and symbols to solve problems that can be expressed in code.

But now a hybrid approach called neurosymbolic AI is gaining traction with a few companies, notably including Amazon, as developers push AI beyond neural networks’ comfort zone. Read my full column here.

Here's a bonus question for Grant Passmore, co-founder and co-CEO of AI startup Imandra.

WSJ Leadership Institute: What does the C-suite needs to understand about neurosymbolic AI?

Passmore: The promise of AI agents is to augment human decision-making at scale, but this only works if we can trust their reasoning. As businesses deploy AI agents for increasingly complex tasks, the need for verifiable logic becomes nonnegotiable. Enterprises scaling AI infrastructure should view neurosymbolic AI as foundational for reliable business applications and build this into their AI strategy.

The infrastructure economics are also compelling. Unlike pure LLM deployments requiring GPU clusters, neurosymbolic agents split their workloads: GPUs handle language understanding while standard CPUs manage complex reasoning and verification. The CPU-based reasoning typically requires far less compute than GPU-intensive LLM alternatives, making this approach both more reliable and cost-effective. This leverages existing enterprise infrastructure.

Are you experimenting with different kinds of AI architectures? Use the links at the end of this email and let us know how that is working out.

Perplexity makes longshot $34.5 billion offer for Google Chrome. 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, WSJ exclusively reports.

Estimates of Chrome’s enterprise value vary widely, but recent ones have ranged from $20 billion to $50 billion.

U.S. District Judge Amit Mehta is weighing whether to force Google to sell the browser as a means of weakening Google’s stranglehold on web search. Mehta last year ruled that Google illegally monopolized the search market and is expected to rule this month on how to restore competition.

The Perplexity offer could be an attempt to signal to the judge that there is an interested buyer, should he force a sale.

Elon Musk takes fight with OpenAI to Apple over its App Store. Musk said Apple is behaving anticompetitively by promoting OpenAI’s ChatGPT while suppressing his Grok AI chatbot in the App Store, renewing his criticism of the iPhone maker’s partnership with OpenAI, WSJ reports.

Musk called Apple’s App Store rankings an “unequivocal antitrust violation” in a post on his social-media platform X on Monday night and threatened “immediate legal action.”

“Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store,” he said in the post.

China's lead in open-source AI jolts Washington and Silicon  Valley. China’s ambition to turn its open-source artificial-intelligence models into a global standard has jolted American companies and policymakers, who fear U.S. models could be eclipsed and are mobilizing their responses to the threat, the WSJ reports. Chinese advances in AI have come one after another this year, starting with the widely heralded DeepSeek and its R1 reasoning model in January. This was followed by Alibaba’s Qwen and a flurry of others since July.

OpenAI's rocky GPT-5 rollout shows struggle to remain undisputed AI leader. OpenAI’s newest AI model, GPT-5, was supposed to cement the startup’s status as the undisputed leader in the AI race. Instead, it has had a tumultuous public launch, frustrating users and prompting Chief Executive Sam Altman to respond, the WSJ says. Users have flooded social media with embarrassing examples of how the chatbot failed to answer simple math questions or accurately draw a map of North America. Altman on Tuesday promised to imbue GPT-5 with a “warmer personality,” restored a popular model and introduced the capability for users to decide which kind of query they want to make. 

Why China loves and fears Nvidia’s H20 chip. One reason: In late July, China’s cyberspace regulator summoned Nvidia representatives to discuss alleged “backdoor” security risks around the H20 chips, including the ability to track chip location and the possibility of a “kill switch” in the chips that would be operable under U.S. orders. Chinese officials have also raised concerns over proposed U.S. legislation seeking to add tracking capabilities for advanced chips sold abroad, WSJ reports.

CoreWeave revenue triples on hot AI demand. The firm's second-quarter revenue more than tripled from a year ago as the company works to keep up with soaring AI demand, WSJ reports.

Anthropic offers AI chatbot Claude to US government for $1. The news comes days after rival OpenAI had announced a similar offer last week, wherein ChatGPT Enterprise was made available to participating U.S. federal agencies for $1 per agency for the next year, Reuters reports.

Crypto firm Circle posts loss in first earnings report after IPO. Circle reported a net loss of $482 million in the second quarter, compared with a profit of $33 million a year ago. Analysts polled by FactSet had estimated a loss of $338 million, WSJ reports.

Crypto entrepreneur Do Kwon pleads guilty to fraud charges stemming from crypto crash. Disgraced cryptocurrency tycoon Do Kwon pleaded guilty to two criminal counts of fraud on Tuesday in connection with the $40 billion crash of his TerraUSD and Luna coins in 2022, WSJ reports.

Inflation held steady in July even as President Trump’s tariff increases left their mark on some consumer prices, keeping a Federal Reserve rate cut in play for next month. (WSJ)

The Trump administration is considering changes to how the federal government collects and reports jobs data, according to White House officials, following President Trump’s decision to fire the Bureau of Labor Statistics commissioner earlier this month in the aftermath of weak employment numbers. (WSJ)

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. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.