Apple Inc. (NASDAQ:AAPL) is reportedly exploring a major move in the artificial intelligence space, holding internal discussions about potentially acquiring Perplexity AI. Perplexity is a rapidly growing AI startup known for its advanced chatbot and AI-driven search capabilities, often viewed as a rival to platforms like OpenAI’s ChatGPT.
According to a Bloomberg report citing sources familiar with the matter, these internal talks involve senior Apple executives, including M&A chief Adrian Perica and services head Eddy Cue. While the discussions are still in their early stages and a formal offer is not guaranteed, the deliberation underscores the urgency within Apple to accelerate its AI strategy.
Why Apple Needs an AI Edge
Apple has faced significant challenges keeping pace with competitors in the artificial intelligence arms race. Its voice assistant, Siri, has been criticized for lagging behind rivals like ChatGPT and Elon Musk’s Grok, creating pressure on the company to integrate more sophisticated AI across its hardware and software ecosystem.
Acquiring Perplexity AI could provide a significant boost to Apple’s ambitions, particularly in AI-powered search and enhancing user interaction. Perplexity’s ability to provide concise, summarized answers to queries, similar to offerings from ChatGPT and Google’s Gemini, aligns with growing user preferences for AI-powered search alternatives.
A Potential $14 Billion Deal and Strategic Shift
Perplexity was recently valued at $14 billion in a funding round, backed by investors including Nvidia. A potential acquisition at or near this valuation would represent Apple’s largest acquisition to date, far surpassing previous deals in scale and potentially signaling a significant shift in the company’s typically conservative approach to major buyouts.
This strategic departure highlights the imperative for Apple to close its perceived AI gap and gain a competitive edge in a market increasingly dominated by generative AI capabilities.
The Google Search Connection and Antitrust Pressure
Apple’s reported interest in Perplexity also comes amid a period of reassessment regarding its long-standing relationship with Google (NASDAQ:GOOGL). Google’s search engine currently serves as the default option on iPhones and other Apple devices, a deal estimated to generate around $20 billion annually for Apple.
However, this lucrative partnership is under intense scrutiny from U.S. antitrust authorities. The U.S. Department of Justice has even proposed banning Google from paying companies to maintain its default search engine status as a potential remedy for its dominance. This regulatory uncertainty is prompting Apple to consider building its own AI-based search engine, potentially integrating Perplexity’s technology directly into its Safari web browser. This move could fundamentally reshape the search landscape and Apple’s reliance on Google.
Competitive Landscape and Deal Status
The AI market is fiercely competitive, with Big Tech giants vying for cutting-edge technology and top talent. The Bloomberg report noted that Meta Platforms (NASDAQ:META) reportedly attempted to acquire Perplexity earlier this year but failed to reach an agreement. Meta subsequently pivoted, making a substantial $14.8 billion investment for a 49% stake in Scale AI and hiring Scale AI’s CEO to lead its new “superintelligence” unit, demonstrating the high stakes and intense competition for AI capabilities.
Despite the internal discussions at Apple, the report indicates that Apple has not yet formally contacted Perplexity’s leadership about a potential takeover. When contacted for comment, Perplexity AI stated they had “no knowledge of any current or future M&A discussions.” Apple did not immediately respond to requests for comment.
While the outcome remains uncertain, Apple’s internal deliberation over a potential Perplexity acquisition clearly signifies its determination to accelerate its AI capabilities, challenge rivals, and navigate the evolving landscape of search and artificial intelligence.
