Recent reports from Bloomberg revealed that Apple executives have held internal discussions about a potential acquisition of the AI startup Perplexity. These discussions are reportedly early and may not necessarily lead to a formal offer.
Surprisingly, this came in after major media outlets sent legal notices to Perplexity over content scraping.
Apple’s head of mergers and acquisitions, Adrian Perica, along with services chief Eddy Cue and other key AI decision-makers, have been involved in these internal discussions.
As of the reports, Apple has not yet made a formal offer to Perplexity’s management, and Perplexity has stated it has no knowledge of any current or future M&A discussions. The talks are described as being in preliminary stages.
Apple is actively seeking to enhance its artificial intelligence capabilities, and acquiring Perplexity would provide a significant boost in this regard. Perplexity is known for its real-time, AI-powered search engine that delivers direct answers and summaries from the web, rather than just a list of links.
The acquisition could bring in much-needed AI talent and technology to Apple, helping it catch up in the rapidly evolving generative AI space where rivals like Google, OpenAI, and Anthropic have made significant strides. As we know, Apple is lagging behind Android in its AI capabilities.
The reason behind Apple’s interest is the potential to develop its own AI-powered search engine. This comes amidst ongoing U.S. antitrust scrutiny of Apple’s lucrative $20 billion annual deal with Google, which makes Google the default search engine on Apple devices. If this agreement is disrupted, Apple would need an alternative.
The technology from Perplexity could be integrated into Apple’s Safari web browser as an alternative search option and also used to improve the intelligence and responsiveness of Siri, Apple’s voice assistant.
Eddy Cue, Apple’s services chief, has previously expressed admiration for Perplexity’s work and acknowledged that the search industry is shifting towards AI tools. Acquiring Perplexity would give Apple a recognized brand in the AI space and a ready-made consumer product.
Perplexity was recently valued at $14 billion in a funding round. A deal at or near this valuation would mark Apple’s largest acquisition in its history, surpassing its $3 billion purchase of Beats in 2014.
Interestingly, Meta Platforms Inc. also reportedly tried to acquire Perplexity earlier this year but failed to reach an agreement on terms. Meta subsequently invested $14.3 billion in Scale AI.
Perplexity is also reportedly in advanced talks with Samsung, Apple’s primary smartphone competitor, for a partnership to integrate its AI technology into Samsung devices. This could complicate Apple’s pursuit of an exclusive deal or acquisition.
Beyond an outright acquisition, Apple is also considering an alternative: a strategic partnership with Perplexity. This would involve integrating Perplexity’s AI engine into Safari and Siri without a full takeover, which would likely be less costly and potentially face less antitrust scrutiny.
The discussions are ongoing and remain at an early stage. No definitive outcome is guaranteed, and any potential acquisition talks might be influenced by the outcome of the Google antitrust trial. Perplexity has publicly stated it has no knowledge of current or future M&A discussions with Apple.