Why both Apple and Meta are interested in buying Perplexity AI | Technology News

Bloomberg first reported that Meta approached Perplexity about a potential takeover before the company recently invested $14.3 billion in Scale AI. Unsurprisingly, the San Francisco–based AI startup was also on Apple’s radar, according to another Bloomberg report. It’s not clear whether Perplexity is up for sale, whether Meta or Apple has held formal talks to acquire the company, or how close either might be to sealing a deal. We may not know until one of them makes an official announcement.

While Meta has been on a shopping spree for months, Apple’s name entering the mix is particularly interesting. It could signal a turning point in Cupertino’s AI strategy—something many have been anticipating, especially after its underwhelming AI showing at the company’s recent developers’ conference. The interest from both Silicon Valley giants raises an important question: why are they eyeing a much smaller company like Perplexity? The answer may be that this rising AI darling holds the potential to supercharge their AI ambitions in the escalating battle against Google and Microsoft-backed OpenAI.

The rise of Perplexity

When Perplexity was founded in 2022 by a team of AI researchers and machine learning experts—Aravind Srinivas, Andy Konwinski, Denis Yarats, and Johnny Ho—in San Francisco, the idea behind the startup was to “democratise access to knowledge.” While the AI-driven search engine and chatbot rose quickly, Perplexity AI was initially mocked as little more than an “AI wrapper.”

Now, its greatest strength lies in allowing users to choose from a range of powerful large language models (LLMs), though it also has its own LLM called Sonar. The startup has built various services on top of these LLMs, giving consumers real choice and flexibility. This ability to rapidly develop and launch new features on top of popular LLMs is what helped Perplexity gain its user base and rise in popularity. As of mid-2024, it reportedly had around 15 million users.

Perplexity’s rise is especially unexpected in its emergence as a serious search engine contender. Both insiders and the general public have praised its search capabilities, with some calling it a potential challenger to Google’s dominance in the space.

Perplexity app on phone. (Express Image)

Many have tried and failed to replicate Google over the years—Neeva, for instance, shut down in 2023 after struggling to gain traction. But Google itself appears to be on shaky ground. Users have increasingly complained that Google’s search results are cluttered with low-quality, spammy websites gaining the rankings. As a result, many people have begun turning to platforms like Reddit and TikTok for more authentic answers.

Neither Perplexity nor ChatGPT has replaced Google yet, but there are growing signs that user search behaviour is shifting—and new players are emerging. Even Google is trying to reinvent itself with a new feature in its search engine called AI Overviews, which offers summarised answers on the search page itself.

While Perplexity is slowly gaining more users, it has also faced controversy. The company has been accused by major publishers of bypassing paywalls and plagiarizing content. That said, Perplexity has quickly become one of the most buzzing products in the tech world. The company is currently valued at over $14 billion.

Apple integrating Perplexity AI and its tech could have a long-term impact

Cupertino took an early lead in artificial intelligence with Siri in the early 2010s, but the company is now virtually absent from the current AI race. In fact, Apple is lagging behind other FAANG — an acronym for the top tech companies: Facebook (now Meta), Apple, Amazon, Netflix, and Google (now Alphabet) — companies when it comes to AI. Its much-hyped Apple Intelligence has been underwhelming at best, and the promised Siri overhaul has been delayed—with no clear timeline in sight.

What’s often overlooked is that Apple’s business model is fundamentally different from the major players in AI. (Image: Anuj Bhatia/The Indian Express)

Apple appears to be years behind the competition, painting a picture of weak leadership, flawed decision-making, and poor integration between teams. The company’s recently concluded Worldwide Developers Conference (WWDC) keynote included little to no mention of AI—a clear sign that Apple failed to anticipate the generative AI boom and was caught off guard. However, Apple has been developing a version of Siri that is entirely based on large language models (LLMs), aiming to make it more conversational and better at processing information. This new version is expected to eventually replace the current hybrid Siri that Apple is using, but we will have to wait until sometime next year to see how polished the new Siri actually is.

A major difference between Apple and other companies in bringing AI to the masses is that Cupertino is more open to partnerships—such as the one it has with OpenAI. The idea is that Apple will combine its own machine learning models with generative AI technologies from partners to power features within Apple Intelligence. It’s a smart way to deliver the best of AI through collaboration. And since Apple has some of the best hardware on the market—and billions of active users—it makes sense to work with various AI companies and build new features on top of their LLMs.

But the real question is whether Apple’s hardware-first business model puts it at a disadvantage in the AI age—or whether we are simply expecting Apple to behave like Google or OpenAI and invest billions in AI as a core product. What’s often overlooked is that Apple’s business model is fundamentally different from the major players in AI. Apple is not (yet) an AI-first company—though it could become one in the future if its devices and software are redesigned around AI.

While Google and OpenAI aim to sell their AI technologies to others and monetise them directly, Apple’s focus is on serving its own customers—those who buy iPhones, Macs, and other devices—by integrating AI features into its existing software ecosystem. Apple is also morally accountable to its users, which is why it maintains a strong emphasis on building a private, user-focused version of AI. If that approach takes more time to deliver, Apple is willing to wait—and that’s okay, even if it takes longer than expected.

Sam Altman, OpenAI’s chief executive and co-founder of World, during the startup’s launch in San Francisco, April 30, 2025. (Jason Henry/The New York Times)

Apple has made a choice, and its partnership-driven approach comes with both pros and cons. The company can either compete directly with OpenAI and Google by developing its own large language model (LLM) as advanced as theirs and integrating it into Apple Intelligence, or it can give consumers the option to choose between assistants—like Siri and Gemini, for example. However, taking the latter route risks complicating Apple’s business model and could create a confusing user experience, such as having two voice assistants running on the same iPhone.

For Apple, its current position in the AI age is a high-risk battle. The company could open its wallet to acquire a major AI company or poach the brightest software developers to build a team of AI experts. Apple might already be quietly doing this behind the scenes. Apple rumoured move to acquire Perplexity AI suggests a potential shift in its AI strategy. In some ways, Perplexity AI and Apple share similarities, and the long-term impact of integrating Perplexity’s technology with Apple’s hardware and software could be significant but in a positive way.

Perplexity’s search tool—with its text interface, voice controls, and Apple-like design—resonates more strongly on iOS than on Android. Perhaps the secret to Perplexity AI lies in how it is redefining the search engine experience.

While traditional search engines like Google (built on crawling, indexing, and ranking) constantly scan and catalog the internet, Perplexity AI takes a different approach. Instead of relying solely on static results, its search engine transforms search into a natural conversation. Users can phrase questions as they would when speaking to another person, rather than using keyword strings. This conversational flow allows users to ask follow-up questions, refine queries, or explore related topics without starting over.

Additionally, Perplexity AI’s responses include numbered footnotes that link directly to original sources, improving transparency. It scans the web rapidly to find the latest information, and thanks to its multimodal capabilities—supporting text, speech, and more—users can even upload images to receive detailed explanations of visual content. The result is a more user-friendly, transparent, and informative search experience.

Perhaps Cupertino is exploring the idea of creating its own AI-based search engine to reduce its long-term reliance on Google. While talk of Apple acquiring Perplexity AI may still be just a rumour, the reality is that Apple needs both top-tier AI talent and a clear long-term strategy for integrating AI into its products. Maybe Apple wants to move beyond its current partnership strategy and is now aiming for full control over the user experience. Gaining access to Perplexity AI’s talented team and its ready-made alternative to Google Search could mark the beginning of what Apple has long envisioned as the core experience behind Apple Intelligence.

Apple’s Craig Federighi at WWDC 2024. (Image: Anuj Bhatia/The Indian Express)

In May, Apple’s Senior Vice-President Eddy Cue revealed that the company had discussed a possible Safari integration with Perplexity during Google’s ongoing search antitrust case. Apple has been under increasing pressure to end its partnership with Google, which currently pays Cupertino billions of dollars each year to remain the default search engine on the iPhone.

While that could mean the end of the billions Apple receives from Google if regulators apply pressure, Cupertino also needs an alternative—and a long-term bet on Perplexity AI makes a lot of sense. Though it remains to be seen whether Apple will invest in Perplexity AI or move to acquire the startup outright, one major hurdle could be regulatory approval. Apple has already faced accusations of creating a monopoly through its App Store and its dominant role as a gatekeeper—concerns that could intensify if it attempts a multi-billion dollar acquisition.

However, Apple has generally avoided high-profile acquisitions. Its last major deal was the $3 billion purchase of Beats in 2014. Historically, the company prefers smaller acquisitions, usually aimed at bringing talented teams on board to kickstart new projects or to fill talent gaps in existing internal efforts.

Meta needs better AI tech to bring down the cost

While Apple is rather cautious with acquisitions, Meta is known for large-scale deals. Meta has made a number of high-profile acquisitions in the past, and in many cases, it has allowed those brands to shine on their own. Take, for example, the photo-sharing platform Instagram or the messaging service WhatsApp—both highly successful deals that continue to pay dividends today. However, CEO Mark Zuckerberg is now under pressure and must answer to shareholders about how the company plans to win the AI race against OpenAI and Google’s parent company, Alphabet. That explains why Meta is on a spending spree and actively eyeing AI companies, even though the cost of acquiring them during the peak of the AI boom is astronomically high.

Meta CEO Mark Zuckerberg at the company’s Connect 2024 event. (File photo)

Just recently, Meta made a $14.3 billion investment in Scale AI, gaining access to star developer and startup founder Alexandr Wang—a Massachusetts Institute of Technology dropout who founded the company at age 19. The 41-year-old Meta CEO has also reportedly attempted to acquire Perplexity AI and Safe Superintelligence, the latter launched a year ago by OpenAI co-founder Ilya Sutskever. Meta is now reportedly planning to hire former GitHub CEO Nat Friedman and his business partner Daniel Gross, who had been leading the $32 billion AI startup Safe Superintelligence.

In recent months, Meta has upped its spending on data centers investments and potential the added cost of AI hardware. Cash isn’t a problem for Meta; what the company is focused on now is assembling a dream team to develop AI technology that aligns with Mark Zuckerberg’s vision.

Unlike Apple, which is a hardware-first company, Meta’s business is more diversified—spanning its core advertising unit, Instagram’s algorithm-driven content, as well as VR and smart glasses initiatives. Mark Zuckerberg often talks about the company’s ambition to build a new computing platform that will one day replace smartphones, and to achieve that, Meta needs better AI models and the technology to power them. It’s a massive undertaking, given Meta’s presence across social media, advertising, and now hardware. It requires not only significant capital but also a long-term vision—and, more importantly, a “superintelligence team.”

But compared to OpenAI and Google, Meta has made slower progress in artificial intelligence, despite having vast resources and top-tier talent. The company’s current AI strategy centers around an open-source approach built on its Llama family of models. In April, Meta announced the Llama 4 AI models, which were not well received by developers. So far, Meta has only released two smaller versions of Llama 4 and has stated it will eventually release a larger and more powerful “Behemoth” model. This suggests that Meta remains behind Google, OpenAI, and Anthropic in the AI race.

That leaves Meta with no choice but to speed up its efforts to hire the right talent. It’s well known in Silicon Valley that star developers are few—and they come at a high cost. In the latest episode of the Uncapped podcast, hosted by his brother, OpenAI CEO Sam Altman revealed that Meta has attempted to recruit OpenAI employees by offering signing bonuses as high as $100 million, along with even larger annual compensation packages. This underscores just how desperate—Meta is to secure top-tier AI talent.

Poaching is normalised in Silicon Valley – and certainly not new.

With Perplexity AI reportedly on the radar of both Meta and Apple, it’s clear that both companies are keen to acquire the Arvind Srinivas–led startup. Meta has previously been in talks to acquire the company, highlighting just how much it values Perplexity’s potential. For Meta, the acquisition would be strategically important in improving its Meta AI assistant—which already serves over a billion monthly active users across the company’s family of apps—by making it more personalised and better tuned for voice-based conversations.