Apple Considers Acquiring AI Startup Perplexity Amid Competitive Struggles
Apple executives have internally discussed potentially acquiring AI startup Perplexity AI, aiming to bolster its AI portfolio amidst ongoing scrutiny of its Google partnership. The discussions are preliminary and haven’t involved Perplexity management yet. A deal could help Apple establish a strong position in AI search engines, especially with significant antitrust challenges looming. Meanwhile, competitors like Meta are aggressively pursuing AI talent as well.
Apple Inc. is, somewhat quietly, toying with the idea of acquiring AI startup Perplexity AI. This has been revealed through internal discussions among execs, including Adrian Perica, head of mergers and acquisitions, and services chief Eddy Cue. But hold your horses — these talks are quite early and might not lead to a concrete offer, as sources shared on condition of anonymity due to the sensitive nature of the talks.
The move could be part of a broader strategy by Apple to create an AI-driven search engine. This development is crucial as the company faces possible ramifications from antitrust scrutiny in the ongoing U.S. Google trial, which has put their $20 billion yearly revenue arrangement with Google in jeopardy. As it stands, Apple hasn’t yet shared its intents with Perplexity’s management, and any acquisition would surely hinge on the verdict from that legal showdown.
Perplexity has made a name for itself, offering real-time answers powered by current web data. If Apple were to make a play for them, it might be after the outcome of the Google case is clearer. Additionally, the search engine landscape could undergo significant shifts based on how these antitrust challenges unfold.
Interestingly enough, after news of these potential talks surfaced, Google shares took a hit, dropping almost 1% in late trading. Perplexity recently wrapped up an investment round that pegged its valuation at a whopping $14 billion. Should a deal culminate at that price, it wouldn’t just be notable — it would eclipse Apple’s previous largest acquisition, Beats, which came in at $3 billion back in 2014.
Notably, Meta attempted to acquire Perplexity earlier this year but walked away empty-handed and opted for a significant stake in Scale AI instead. This move shows Meta’s competitive edge in the race for AI talent, and it doesn’t look like they’re slowing down. Apple finds itself also vying for talent. For instance, discussions with Daniel Gross, co-founder of Safe Superintelligence Inc., are heating up as both tech giants look to make attractive pitches to him.
Daniel Gross is no stranger to Apple; he once sold his startup Cue to the company. The technology from Cue has been a building block for the AI features within iOS. Some of his co-founders are also deeply connected within Apple’s projects, including Siri and others. As Apple aims to catch up with the generative AI race, they find themselves in a state of urgency. The revamped Siri, also, unfortunately succumbed to indefinite delays this year, now pushed to have it in place by spring.
In a rather uninspiring presentation at their Worldwide Developers Conference, Apple unveiled just a handful of new AI features, sparking concerns about their innovation pace. Yet, a move to acquire Perplexity could change the game — not only would Apple gain access to fresh talent, but it would also bolster its brand in the AI arena. Interestingly, if outright acquisition isn’t on the table, there’s been chatter about a possible partnership, which would leverage Perplexity’s capabilities within Apple’s Safari browser.
Of course, nothing comes without complications. There’s talk of another deal brewing between Perplexity and rival Samsung Electronics, further complicating Apple’s desires as they navigate this competitive landscape. Perplexity noted in their statement that it’s no surprise that major companies look to provide top-notch AI search capabilities for users.
Eddy Cue, while speaking in the Google trial, mentioned that the search engine domain is shifting toward AI tools, hinting at the urgency behind these talks: “We’ve been pretty impressed with what Perplexity has done.” The developments are surely a signal of the fierce competition for leading AI technology and talent as the tech world stands on the brink of some significant changes.
Apple Inc.’s potential acquisition of Perplexity AI exemplifies the ongoing battle for AI dominance among tech giants. With talks still in early stages and the future of a lucrative Google deal hanging in the balance due to antitrust scrutiny, any definitive actions may take time. The evolving landscape of AI emphasizes the urgency for Apple to bolster its talent and technologies in a field currently led by competitors like Meta. As the situation develops, the stakes grow ever higher, making the tech industry watch closely.
Original Source: fortune.com
