Apple Inc. executives are reportedly in early internal discussions about a potential bid for artificial intelligence start-up Perplexity AI. This move signals Apple’s intent to bolster its AI talent and technology, particularly as its lucrative long-standing agreement with Google faces threats from US antitrust enforcers. That partnership, which makes Google the default search engine on Apple devices, generates an estimated $20 billion annually for Apple.
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Discussions, led by Adrian Perica (head of M&A), Eddy Cue (services chief), and top AI decision-makers, are still preliminary and may not result in an offer. Perplexity AI, known for its real-time AI-based search engine that pulls information from the web, confirmed no knowledge of any current or future M&A talks. Earlier reports indicated Meta Platforms Inc. also attempted to acquire Perplexity this year.
A potential acquisition of Perplexity would significantly aid Apple in developing its own AI-based search engine. Such a deal would likely not proceed until after a decision in the Google antitrust trial, as the outcome will determine the future of Apple’s arrangement with Google. News of Apple’s discussions with Perplexity reportedly caused Google’s shares to fall.
Perplexity recently completed an investment round valuing it at $14 billion. An acquisition at or near this level would be Apple’s largest in history, surpassing its $3 billion takeover of Beats in 2014.
The pursuit of Perplexity underscores a broader fight for AI talent among tech giants. After failing to acquire Perplexity, Meta instead bought a 49% stake in Scale AI for $14.3 billion, part of its effort to build a “superintelligence AI team.” Apple is also reportedly vying for top AI talent like Daniel Gross, co-founder of Safe Superintelligence Inc. Gross previously sold his startup, Cue, to Apple in 2013, which contributed to early iOS AI features. One of Gross’s co-founders, Robby Walker, now leads Apple’s “Knowledge” project, aiming to create a ChatGPT rival.
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Apple’s aggressive pursuit of AI talent and technology aims to help it catch up in generative AI, an area where it currently lags rivals. While Apple unveiled new AI enhancements at WWDC this month, including live translation and a deeper partnership with OpenAI for ChatGPT-based image generation, a revamped Siri has been delayed until next spring. Acquiring Perplexity could provide Apple with a crucial infusion of AI talent, a recognized brand, a consumer product, and a boost for future recruiting.
An alternative plan involves a partnership with Perplexity rather than an outright acquisition. This would see Perplexity integrated as an AI search option in Apple’s Safari browser and potentially within Siri. Apple has reportedly held multiple meetings with Perplexity, with its AI team actively evaluating the technology.
However, a significant potential obstacle is an in-the-works deal between Perplexity and Samsung Electronics Co., Apple’s largest smartphone competitor. Samsung reportedly plans to announce a deep partnership with Perplexity, highlighting AI features as a critical new battleground for the two rivals. Eddy Cue, who oversees Apple’s services, previously testified in the Google antitrust trial that the industry is shifting towards AI search tools, expressing his impression with Perplexity’s work and confirming initial discussions.
