As Apple races to catch up in the generative AI arena, a recent report indicates that the company is contemplating its largest acquisition to date.
According to Bloomberg, Apple executives have engaged in internal conversations regarding a potential offer for Perplexity AI, a rapidly expanding AI startup renowned for its conversational web search platform.
## This would represent Apple’s largest acquisition to date
As stated by Mark Gurman, these discussions are still in the preliminary phase and may not lead to an official bid, but the concept has allegedly been discussed among Apple’s mergers and acquisitions head Adrian Perica, services chief Eddy Cue, and the company’s top AI leadership.
Perplexity recently concluded a funding round that valued it at $14 billion, which would make an acquisition a groundbreaking step for Apple, significantly higher than the $3 billion Beats acquisition in 2014.
Here’s what Gurman says about the potential acquisition:
> “Acquiring Perplexity would provide Apple with a boost in AI talent, an established brand in the AI realm, and a consumer product. A deal could also help enhance future recruitment efforts.”
While the report mentions that Apple has conducted several meetings with Perplexity in the past few months, and its internal AI divisions have been closely assessing the technology, Apple chose not to comment, and Perplexity stated it has “no awareness of any ongoing or future M&A discussions.”
## The rationale for acquiring Perplexity
Firstly, there’s the potential risk of Apple’s $20 billion annual search agreement with Google being dismantled due to the US government’s ongoing antitrust litigation. Eddy Cue himself hinted at this during his testimony earlier this year, asserting that the industry is shifting away from conventional web search towards AI-powered responses.
Secondly, Perplexity possesses what Apple currently lacks: a consumer-centric AI search product with real-time web access and brand recognition in the AI sector, all at a much lower (though still exorbitant) cost compared to direct rivals like OpenAI. Perplexity even boasts its own iPhone assistant that, despite the system’s deliberate constraints, performs significantly better than Siri and ChatGPT in various tasks.
Perhaps this is the reason, beyond a complete acquisition, that Apple is also reportedly investigating a possible partnership that could integrate Perplexity into Safari as a search alternative or incorporate it into Siri’s responses.
One significant challenge: Samsung. The report indicates that Samsung is nearing the finalization of its own substantial partnership with Perplexity, which could complicate any exclusive deal with Apple. Notably, Bloomberg reported earlier today that Meta has also engaged in acquisition talks with Perplexity but appears to have abandoned the idea in favor of its recent $14B investment in Scale AI.
Do you believe Apple should acquire Perplexity? If not them, who do you think Apple should pursue for acquisition? Share your thoughts in the comments.
