Apple has held internal discussions about potentially bidding for artificial intelligence startup Perplexity AI, according to a Bloomberg report by Mark Gurman. The report states that the move is part of Apple’s broader effort to bolster its generative AI capabilities and potentially fill gaps left by a looming threat to its lucrative search partnership with Google.
The discussions, still at an early stage, involved Apple’s mergers and acquisitions head Adrian Perica, services chief Eddy Cue, and senior AI leadership. While no formal offer has been made to Perplexity, Apple is reportedly exploring options as it evaluates the startup’s technology and talent.
Perplexity has not responded to Fortune India’s request for comment at the time of writing the story.
The iPhone maker is facing increasing pressure to accelerate its AI strategy. The U.S. Justice Department’s antitrust case against Google threatens the longstanding deal that makes Google the default search engine on Apple devices, a partnership estimated to generate about $20 billion annually for Apple. As a contingency, Apple is considering building its own AI-powered search engine. A deal with Aravind Srinivas-led Perplexity could play a central role in that pivot.
Reports in May revealed that Perplexity AI was in advanced talks to raise $500 million at a $14 billion valuation, with Accel set to lead the round. Perplexity in December had a $9 billion valuation and according to CNBC was under $100 million in annual recurring revenue. The platform is positioning itself as a key player in the AI search space. It faces stiff competition from Google, OpenAI, Microsoft’s Bing, and Anthropic, all of whom have recently introduced or upgraded AI-powered search features.
A potential acquisition of Perplexity would mark the largest in Apple’s history, surpassing its $3 billion acquisition of Beats in 2014. Alternatively, Apple may pursue a strategic partnership with the AI search startup. That could include integrating Perplexity’s engine into Safari or Siri, a move that would offer Apple greater AI capabilities without a full-scale buyout.
Apple has already held several meetings with Perplexity in recent months and is actively evaluating its AI technology. However, a prospective tie-up may face hurdles, including Perplexity’s parallel discussions with Samsung for a deep product partnership. Given Samsung’s status as Apple’s chief smartphone rival, such a deal could complicate Apple’s plans.
The report also outlines Apple’s intensified AI talent hunt. The company recently sought to recruit Daniel Gross, co-founder of AI company Safe Superintelligence, who is also being courted by Meta. Gross previously sold a startup to Apple in 2013, and his former co-founder Robby Walker currently leads a new Apple AI initiative known as Project Knowledge, aimed at building a ChatGPT rival.
Apple’s interest in Perplexity follows a failed acquisition attempt by Meta earlier this year, before the social media giant opted to invest in Scale AI instead.