Apple Explores Potential Acquisition or Partnership with AI Startup Perplexity

Report: Apple held internal talks about acquiring Perplexity - 9to5Mac

As Apple scrambles to play catch-up in the generative AI race, a new report says the company has considered making its biggest acquisition ever. According to Bloomberg, Apple executives have held internal discussions about a potential bid for Perplexity AI, the fast-growing AI startup known for its conversational web search platform. As reported by Mark Gurman, the talks are still at an early stage and may not result in an actual offer, but the idea has reportedly been floated between Apple's mergers and acquisitions lead Adrian Perica, services chief Eddy Cue, and top AI leadership inside the company. Perplexity recently closed a funding round that valued it at $14 billion, which would make its acquisition an unprecedented move for Apple, well above the $3 billion Beats deal in 2014. Here's Gurman on the possible acquisition: "Buying Perplexity would give Apple an infusion of AI talent, a known brand in the AI space and a consumer product. A deal could also potentially assist with future recruiting efforts." While the report says Apple has held multiple meetings with Perplexity in recent months, and its internal AI teams have been evaluating the technology closely, Apple declined to comment, and Perplexity said it has "no knowledge of any current or future M&A discussions". First, there's the looming threat of Apple's $20 billion-a-year search deal with Google being unwound following the US government's ongoing antitrust case. Eddy Cue himself hinted at this during his testimony earlier this year, as he claimed that the industry is pivoting away from traditional web search toward AI-driven answers. Second, Perplexity already has what Apple lacks: a consumer-facing AI search product with real-time web access and name recognition in the AI space, at a much lower (although still astronomical) price than direct competitors like, say, OpenAI. Perplexity even has its own iPhone assistant that, despite the system's intentional limitations, does way better than Siri and ChatGPT at multiple tasks. Which maybe is why beyond a full-blown acquisition, Apple is also said to be exploring a potential partnership, one that could see Perplexity integrated into Safari as a search option or baked into Siri responses. One big wrinkle: Samsung. The report says Samsung is close to finalizing its own major partnership with Perplexity, which could make any exclusive Apple deal more complicated. It is worth mentioning that Bloomberg reported earlier today that Meta has also held acquisition discussions with Perplexity, although it seems to have given up on the idea and moved on to its recent $14B investment in Scale AI instead. Do you think Apple should buy Perplexity? If not them, who do you think Apple should acquire? Let us know in the comments.

Apple Internally Discussing Whether to Bid to Acquire Perplexity AI

Apple executives have been discussing the possibility of the company making a bid to acquire Perplexity AI, according to Bloomberg's Mark Gurman. Perplexity is one of the leading AI startups that has proven popular as an AI-infused web search engine. Mergers and acquisitions chief Adrian Perica, services head Eddy Cue, and other executives overseeing Apple's AI efforts have been participating in the discussions, which Gurman says "are at an early stage and may not lead to an offer." Apple declined to comment, while Perplexity said that it has "no knowledge of any current or future M&A discussions involving Perplexity." Whether or not Apple makes a bid for Perplexity may hinge on the outcome of the ongoing Google antitrust trial, as Apple's deal with the search engine giant to make Google the default search engine on Apple devices and which brings Apple roughly $20 billion per year could be nullified as part of a ruling against Google. Perplexity's most recent funding round valued the company at $14 billion, so an outright acquisition by Apple would undoubtedly be by far the largest deal in the Cupertino company's history, topping its $3 billion purchase of Beats over a decade ago. As an alternative to an acquisition, Apple could instead choose to partner with Perplexity to add its AI search capabilities to Safari and Siri, and the two companies have met multiple times in recent months to discuss Perplexity's technology. Perplexity is, however, said to be close to a far-reaching deal with Samsung to bringing its AI features to the phones of Apple's biggest rival, a move that could complicate any potential deal with Apple.

Apple execs may be newly considering buying AI firm Perplexity

Perhaps in an acquihire to boost search, or to improve Siri, Apple executives have reportedly recently discussed buying or partnering with AI startup Perplexity. The two executives linked to discussions are said to be the company's head of mergers Adrian Perica, and Eddy Cue. According to unnamed sources within Apple, internal discussions are in a very early stage, and there has not yet been an offer made. Also a possibility is a team-up with Perplexity, rather than an outright buy. Any partnership would put Perplexity in Safari, and perhaps integrated into the long-delayed improved Siri project, that is now not expected to ship until 2026. The report on Friday by Bloomberg discusses that the move may get made to help Apple develop an AI-powered search engine. Google pays Apple about $20 billion a year to be the primary search engine on the iPhone and Mac, but that deal is in danger after antitrust and regulatory discussions. If a deal is reached to buy Perplexity, the deal would be the largest in Apple history, and not by a little. Perplexity is valued at about $14 billion. This far eclipses the deal that Apple made in 2014 for Beats, which cost the company $3 billion. The news may not come as a giant surprise, if you've been following the Google antitrust trial. On the stand, Cue was clear that they had talked at least some with Perplexity. "We've been pretty impressed with what Perplexity has done, so we've started some discussions with them about what they're doing," Cue said, while under oath. Beyond even that, the report isn't outside the realm of possibility. Previous rumors and Craig Federighi himself have said that Apple is looking at working with multiple partners to deliver an assortment of AI and search options for consumers. The main name tied to Apple's AI effort is obviously OpenAI. Before the Apple Intelligence rollout, Google and Meta were named as possible participants. Anthropic and Perplexity were also mentioned, at least in passing. To us, it seems more likely that Apple is dealing with AI providers the same way they handle hardware component suppliers. Having multiple providers on the hook, as it were, in this case may ultimately give users more choice, but will also keep costs down for Apple.