Apple weighs Perplexity AI acquisition, eyes AI-powered search alternative: Report
Apple Inc. is reportedly weighing the possibility of acquiring artificial intelligence (AI) startup Perplexity AI, as the tech giant steps up efforts to enhance its generative AI capabilities and potentially reduce its reliance on Google for search services.
According to sources familiar with the matter, Adrian Perica, Apple's head of mergers and acquisitions, has been engaged in preliminary discussions with services chief Eddy Cue and senior figures leading Apple's AI strategy, reported Bloomberg.
While the deliberations possibly remain in their early stages and no formal offer has been tabled, the potential move reflects Apple's growing urgency to secure both advanced AI technology and top-tier talent.
A deal with Perplexity could position Apple to develop its own AI-powered search engine, a strategic hedge as its lucrative, long-standing agreement with Google faces mounting scrutiny from US antitrust regulators. That partnership, which makes Google the default search engine on Apple devices, reportedly earns the iPhone maker an estimated $20 billion annually. However, its future remains uncertain pending the outcome of a major antitrust trial.
As of now, Apple has not approached Perplexity's management directly regarding a takeover. Meanwhile, the AI firm stated it was unaware of any acquisition discussions. Apple, true to form, has declined to comment.
Perplexity, valued at $14 billion following a recent funding round, offers real-time answers to user queries by drawing from current web data, positioning itself as a next-generation alternative to conventional search engines. Any deal approaching its valuation would mark the largest acquisition in Apple's history, surpassing its $3 billion purchase of Beats Electronics in 2014.
The competition for AI talent is intensifying. Meta is also in advanced talks to recruit Daniel Gross, co-founder of Safe Superintelligence Inc. Apple, however, is attempting to lure Gross back into its fold. Gross previously sold his startup Cue to Apple in 2013, a move that played a key role in shaping Apple's early AI functionalities. His co-founder, Robby Walker, recently transitioned from leading Siri to spearheading an Apple initiative called 'Knowledge', which is focused on developing a ChatGPT rival using real-time internet data.
Internally, Apple has held multiple technical discussions with Perplexity in recent months, evaluating its platform and capabilities. The company is also reportedly exploring the possibility of a strategic partnership instead of a full acquisition. One such option includes integrating Perplexity into Safari as a search engine alternative and embedding its features into Siri.
Cue, who oversees Apple's services division, including iCloud and Apple TV+, previously acknowledged Perplexity's promise while testifying at the Google antitrust trial. 'We've been pretty impressed with what Perplexity has done,' he noted, adding that the future of internet search is increasingly being shaped by AI-driven solutions rather than traditional engines.
(With inputs from Bloomberg)
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