Apple Explores AI Acquisitions: Mistral and Perplexity in the Spotlight

Apple still debating Mistral and Perplexity M&A amid looming Google Search shakeup - 9to5Mac

Rumors of Apple considering a Perplexity acquisition refuse to cease. Meanwhile, another AI firm continues to be part of the conversation. Both are mentioned in a new report that paints a picture of Eddy Cue as pro-acquisition despite pushback from other Apple executives. A new report from The Information details the latest on Apple's AI acquisition ambitions. The Information reports that Apple is telling bankers that "it's carrying on with its strategy of focusing on smaller deals in AI," despite Tim Cook recently teasing out that Apple is "very open to M&A that accelerates our roadmap." Still, both Perplexity and French AI firm Mistral remain part of the conversation within Apple, especially as Apple's Google Search deal is at the mercy of an upcoming court decision. The Information cites a "person familiar with his thinking" in reporting that Eddy Cue is most vocal about these sorts of big AI acquisitions. The report claims that Cue previously championed two major M&A deals in the past, specifically Netflix and Tesla, but both were shot down by Tim Cook. Another voice inside the company that is less sold on buying its way out of the AI problem is Craig Federighi. According to the report, Federighi is hesitant on any major AI deal because he believes his team can build their way out of Apple's AI deficit. The report goes on to detail how Apple's acquisition process usually plays out, while noting that the company has a major aversion to overpaying for any company or team. Neither Perplexity nor Mistral AI are new to this discussion, and the report doesn't provide an update on the current thinking behind either acquisition. For its part, Perplexity excels at AI search using models provided by companies like OpenAI and others. Mistral AI is viewed as a smaller player in the space with its own models and expertise at developing new systems. Beyond this report, Apple has recently been said to be holding a competition of sorts between its in-house AI team and third-party model providers when it comes to building the overhauled Siri. Anthropic, OpenAI, and Google are reportedly involved.

Report: Apple Discussed Buying Mistral AI and Perplexity

Services chief Eddy Cue is apparently the most vocal advocate of a deal to buy AI firms to bolster the company's offerings. Cue previously supported propositions of Apple acquiring Netflix and Tesla, both of which Apple CEO Tim Cook turned down. Other executives such as software chief Craig Federighi have reportedly been reluctant to acquire AI startups, believing that Apple can build its own AI technology in-house. Mistral AI is a Paris-based artificial intelligence company founded in 2023 that develops open-weight large language models designed to be smaller, faster, and easier to deploy than many competitors, while still delivering strong performance across reasoning and coding tasks. The company positions itself as a European alternative to American players like OpenAI and Anthropic. Perplexity is a U.S.-based artificial intelligence company that builds an AI-powered search and answer engine combining large language models with real-time web indexing to provide cited, conversational responses. Unlike traditional search engines, it prioritizes transparency by showing sources alongside answers, positioning itself as an alternative to Google for information retrieval. Apple is said to be hesitant to do a deal, which would likely cost billions of dollars. Apple has rarely spent more than a hundred million dollars on an acquision, with Beats at $3 billion and Intel's wireless modem business at $1 billion. If a federal ruling ends the $20 billion deal between Apple and Alphabet that makes Google the default search engine on its devices, the company could be compelled to acquire an AI-powered search startup to fill that gap. For now, Apple apparently told bankers that it plans to continue with its strategy of focusing on smaller deals in AI.

Apple eyes Mistral and Perplexity: is Siri set to crush Google and Samsung in AI?

Apple is reportedly exploring acquisitions of two high-profile AI startups, Mistral and Perplexity, signaling a notable shift in its approach to artificial intelligence. Traditionally cautious in mergers, the tech giant appears ready to accelerate its AI roadmap amid rising competition from Google and Microsoft, which have been aggressively advancing AI integration. These internal discussions suggest Apple is seeking innovative solutions to enhance Siri, Safari, and other services, while also reducing reliance on external partners. The potential move reflects growing urgency to remain competitive in the rapidly evolving AI landscape. Apple is reportedly weighing internal discussions about acquiring two prominent AI startups, Mistral and Perplexity, as part of a broader push to strengthen its artificial intelligence capabilities. The tech giant, traditionally cautious in its acquisition strategy, appears to be rethinking its approach amid rising pressure from competitors and the evolving AI landscape. Companies like Google and Microsoft have aggressively integrated AI into their products and services, from search engines to office productivity tools, leaving Apple facing questions about its own innovation pace. With consumer expectations for intelligent assistants and AI-driven services increasing, Apple is exploring ways to catch up without compromising its philosophy of privacy-focused, tightly integrated technology. Apple has historically taken a conservative stance on mergers and acquisitions, especially in emerging tech fields such as AI. The company has preferred to develop new technologies internally rather than rely on large-scale acquisitions. However, recent developments suggest this may be changing. Reports indicate that Apple's leadership is now open to larger acquisitions that could accelerate the company's AI roadmap. The company has faced growing pressure from investors and industry observers to enhance its AI offerings, particularly as rivals introduce increasingly sophisticated AI features. This strategic shift signals that Apple recognizes the need to stay competitive in the rapidly evolving AI market. By considering companies like Mistral and Perplexity, Apple could gain advanced AI technology more quickly than through internal development alone. The discussions underscore a willingness to balance internal innovation with strategic acquisitions to maintain relevance in AI-driven consumer experiences. Mistral is a French AI startup founded in 2023 that has quickly gained recognition for its work on open-weight large language models. These models are designed to be smaller, faster, and more efficient than many competitors, making them easier to deploy across diverse platforms. The company has raised substantial funding and reached a valuation exceeding $2 billion, signaling strong investor confidence in its technology. Mistral's models are considered innovative because they combine high performance with flexibility, allowing integration into products without the massive computational requirements often associated with cutting-edge AI systems. For Apple, acquiring Mistral could provide immediate access to sophisticated language models that enhance virtual assistants like Siri, making them more conversational, context-aware, and capable of handling complex queries. This acquisition would allow Apple to accelerate development while maintaining control over data privacy and user experience, hallmarks of the company's approach to AI. Perplexity is a U.S.-based AI company that has developed an AI-powered search and answer engine. Its platform combines large language models with real-time web indexing to provide responses that are not only conversational but also cited, giving users transparency about where information originates. Unlike traditional search engines, which often prioritize ranking over accuracy or context, Perplexity emphasizes clarity and source attribution. This approach aligns well with Apple's reputation for user trust and privacy, providing a possible alternative to Google's dominance in search. Integrating Perplexity's technology could significantly improve Apple's own search capabilities within Safari, Siri, and other services. It could reduce Apple's reliance on Google, which currently pays the company billions to remain the default search engine on iOS devices. More broadly, Perplexity could provide a foundation for next-generation AI tools that combine reliable information retrieval with natural, human-like interactions. Acquiring Mistral and Perplexity could provide Apple with multiple strategic advantages. For one, Siri and other Apple AI services could become far more capable, handling complex queries with greater nuance and understanding. Mistral's efficient language models could enable faster, more responsive virtual assistants, while Perplexity's AI-driven search could enhance both accuracy and trustworthiness. Additionally, reducing dependence on Google for search could give Apple more autonomy and long-term cost savings. It could also open the door for new AI-driven products and services, from smarter recommendations in apps to more personalized digital experiences. Such acquisitions could also position Apple as a stronger competitor in the AI arms race. By integrating advanced models quickly, Apple can close the innovation gap with rivals and better meet rising consumer expectations for AI-powered experiences across devices. While the potential benefits are clear, acquiring startups like Mistral and Perplexity comes with challenges. Integrating new technologies into Apple's ecosystem can be complex, especially when balancing innovation with the company's strict privacy standards and hardware-software integration requirements. There are also regulatory considerations. Any high-profile acquisition could attract scrutiny from antitrust authorities, particularly given Apple's size and influence in the tech market. Internal alignment is another factor -- Apple has historically been cautious about large-scale acquisitions, and ensuring that new teams and technologies mesh with existing corporate culture will require careful planning. Finally, there is the financial risk. Large acquisitions demand significant investment, and Apple will need to weigh the potential returns against the cost and complexity of integrating these startups effectively. Apple's exploration of Mistral and Perplexity highlights a strategic pivot toward more aggressive AI investments. If successful, these acquisitions could transform Apple's AI capabilities, from making Siri genuinely competitive with Google Assistant to enabling entirely new products powered by AI. However, the path is not without uncertainty. Integration challenges, financial considerations, and regulatory hurdles will all shape the ultimate outcome. Even so, these internal discussions signal that Apple is willing to consider bold moves to maintain its place at the forefront of technology. Q1: Why is Apple considering Mistral and Perplexity acquisitions? Apple wants to enhance AI capabilities in Siri and Safari, reduce reliance on Google, and accelerate its AI roadmap. Q2: How could Mistral and Perplexity help Apple? Mistral provides advanced language models, while Perplexity offers AI-driven search, boosting Apple's AI services and user experience.

Apple internally discussed buying Mistral, Perplexity: Report - The Economic Times

CEO Tim Cook signaled last month that Apple was open to larger AI-related acquisitions to accelerate its roadmap, a shift from its historically conservative M&A posture.Apple has held talks internally about acquiring French AI startup Mistral as well as Perplexity, the Information reported on Tuesday, citing people familiar with the matter. Apple has trailed rivals such as Google and Samsung in terms of roll-out of AI features in its devices. CEO Tim Cook signaled last month that Apple was open to larger AI-related acquisitions to accelerate its roadmap, a shift from its historically conservative M&A posture. Reuters could not immediately verify the report. Apple, Mistral and Perplexity did not immediately respond to Reuters' requests for comment. Nvidia-backed Mistral was valued at more than $6 billion after its Series B funding round last year and the Financial Times reported this month that the French company was in talks to raise $1 billion at a valuation of $10 billion. Executives at the iPhone maker have held internal talks about potentially bidding for Nvidia and Jeff Bezos-backed Perplexity, Bloomberg News reported earlier this year.

Apple internally discussed buying Mistral, Perplexity, the Information reports

(Reuters) -Apple has held talks internally about acquiring French AI startup Mistral as well as Perplexity, the Information reported on Tuesday, citing people familiar with the matter. Apple has trailed rivals such as Alphabet's Google and Samsung in terms of roll-out of AI features in its devices. CEO Tim Cook signaled last month that Apple was open to larger AI-related acquisitions to accelerate its roadmap, a shift from its historically conservative M&A posture. Reuters could not immediately verify the report. Perplexity, which is backed by Nvidia and Amazon founder Jeff Bezos, said it is unaware of any merger conversations including the company, aside from its own acquisitions. Apple and Mistral did not immediately respond to Reuters' requests for comment. Mistral, backed by Nvidia, was valued at more than $6 billion after its Series B funding round last year and the Financial Times reported this month that the French company was in talks to raise $1 billion at a valuation of $10 billion. Executives at the iPhone maker have held internal talks about potentially bidding for Perplexity, Bloomberg News reported earlier this year. (Reporting by Akash Sriram in Bengaluru; Editing by Leroy Leo and Maju Samuel)