Meta's AI Ambitions: Failed Perplexity AI Acquisition Talks Precede Scale AI Investment
3 Sources
3 Sources
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Meta Discussed Buying Perplexity Before Investing in Scale AI
Meta Platforms Inc. held discussions with artificial intelligence search startup Perplexity AI Inc. about a possible takeover before moving ahead with a multibillion-dollar investment in Scale AI, according to people familiar with the matter. The two companies couldn't come to an agreement and decided not to pursue the deal, said the people, who asked not to be named as the details of the talks aren't public. The financial terms under discussion could not be learned. Perplexity recently closed a new round of funding at a $14 billion valuation.
[2]
Perplexity AI walked away from potential Meta deal before Zuckerberg's Scale AI stake
The two companies did not finalize a deal, and Perplexity ultimately walked away from the discussions, according to a source familiar with the matter who asked not to be named because of the confidential nature of the negotiations. Bloomberg earlier reported the talks between Meta and Perplexity. Perplexity declined to comment. Meta did not immediately respond to CNBC's request for comment. Meta's attempt to purchase Perplexity serves as the latest example of Mark Zuckerberg's aggressive push to bolster his company's AI efforts amid fierce competition from OpenAI and Google parent Alphabet. Zuckerberg has grown agitated that rivals like OpenAI appear to be ahead in both underlying AI models and consumer-facing apps, and he is going to extreme lengths to hire top AI talent, as CNBC has previously reported.
[3]
Meta considers Perplexity AI acquisition before Scale AI investment - Bloomberg By Investing.com
Investing.com -- Meta Platforms Inc (NASDAQ:META). discussed a potential acquisition of AI search startup Perplexity AI Inc. before finalizing its recent investment in Scale AI, according to Bloomberg, citing people familiar with the matter. The companies were unable to reach an agreement and decided against pursuing the deal, said the sources, who requested anonymity because the discussions were private. Financial terms of the potential acquisition were not disclosed. Perplexity recently secured funding at a $14 billion valuation. These previously unreported talks highlight Meta CEO Mark Zuckerberg's strategy to use acquisitions and high-profile hiring to advance the company's position in artificial intelligence. The discussions occurred before Meta finalized its $14.3 billion investment for a 49% stake in data-labeling company Scale AI earlier this month.
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Meta Platforms explored acquiring Perplexity AI before investing in Scale AI, highlighting the company's aggressive AI strategy amid fierce competition in the tech industry.
Meta's Unsuccessful Bid for Perplexity AI
Meta Platforms Inc., the tech giant formerly known as Facebook, recently engaged in discussions to acquire artificial intelligence search startup Perplexity AI Inc. These talks, which ultimately did not result in a deal, preceded Meta's substantial investment in Scale AI, according to sources familiar with the matter 1.
Source: Bloomberg Business
The discussions between Meta and Perplexity AI highlight the intense competition and strategic maneuvering taking place in the AI industry. While the financial terms of the potential acquisition were not disclosed, it's worth noting that Perplexity AI recently closed a funding round valuing the company at $14 billion 3.
The Aftermath: Meta's Investment in Scale AI
Following the unsuccessful talks with Perplexity AI, Meta pivoted to a different strategy. The company finalized a $14.3 billion investment for a 49% stake in Scale AI, a data-labeling company 3. This move underscores Meta's commitment to advancing its position in the artificial intelligence space through strategic investments and partnerships.
Zuckerberg's Aggressive AI Strategy
Source: CNBC
The attempted acquisition of Perplexity AI and the subsequent investment in Scale AI are part of a broader strategy led by Meta CEO Mark Zuckerberg. Sources indicate that Zuckerberg has grown increasingly concerned about Meta's position in the AI race, particularly in comparison to competitors like OpenAI and Google's parent company, Alphabet 2.
To address this perceived gap, Zuckerberg is reportedly taking extreme measures to bolster Meta's AI capabilities. This includes not only exploring acquisitions and making significant investments but also aggressively hiring top AI talent 2.
The Competitive Landscape in AI
Meta's actions reflect the intensifying competition in the AI industry. With companies like OpenAI and Google making significant strides in both underlying AI models and consumer-facing applications, Meta appears to be feeling the pressure to catch up and establish itself as a leader in the field.
The high valuation of Perplexity AI and the substantial investment in Scale AI demonstrate the significant financial stakes involved in this technological arms race. As AI continues to evolve and shape various aspects of technology and business, companies are willing to make bold moves and substantial investments to secure their positions in this rapidly advancing field.
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