Apple is reportedly considering acquiring Perplexity AI to bolster its AI capabilities and aid in the development of its own in-house search engine.
Perplexity AI: Perplexity AI, a prominent name in the artificial intelligence field, is currently the subject of significant industry buzz. Reports suggest that Apple, one of the world's largest tech companies, may be preparing to acquire this startup. If this deal materializes, it could be the largest acquisition in Apple's history.
What is Perplexity AI?
Perplexity AI is an advanced generative AI startup providing users with factual and context-based answers through an AI-powered search engine. Its key feature is delivering direct answers to questions while also citing their sources. It's considered an AI alternative to Google Search.
The company achieved a valuation of approximately $14 billion (roughly ₹1.21 trillion) in its latest funding round, establishing it as a major player in the AI industry.
Apple's Strategy: A Bid for AI Dominance
Apple has historically emphasized in-house development of its technology. However, in the rapidly evolving AI landscape, where companies like Google, Microsoft, and Meta have already launched their LLMs (Large Language Models), Apple's Siri has yet to achieve comparable effectiveness.
Despite the announcement of "Apple Intelligence" in iOS 18, Siri's AI version is reportedly facing significant delays and requires substantial improvement. Acquiring an AI-focused company like Perplexity could offer Apple a chance to address these weaknesses.
Is Apple Acquiring Perplexity?
According to reports from Bloomberg and Reuters, Apple has initiated internal discussions regarding the potential acquisition of Perplexity AI. Adrian Perica, Apple's head of corporate development, who oversees the company's mergers & acquisitions strategy, is reportedly leading these discussions.
However, the discussions are currently at a preliminary stage. Apple has not yet engaged in direct negotiations with Perplexity, nor has it submitted a formal offer. Experts believe that if this deal goes through, it could significantly alter Apple's direction and future plans.
The Potential Cost for Apple
Throughout its history, Apple has made only three acquisitions exceeding $1 billion. The most expensive was Beats Electronics, acquired in 2014 for $3 billion.
A Perplexity acquisition could represent a $14 billion investment—making it Apple's largest acquisition to date.
Underlying Reasons for the Potential Deal
- Reducing Reliance on Google for AI Search: Apple's Safari browser currently uses Google as its default search engine, yielding Apple annual royalties of up to $20 billion. However, ongoing antitrust lawsuits from the US government threaten this deal. Developing its own search engine has become strategically crucial for Apple.
- Acquiring AI Talent: Perplexity boasts top-tier AI engineers and researchers. Integrating them into its ecosystem would significantly strengthen Apple's AI portfolio.
- Expanding from AI Hardware to Software: Apple is preparing to incorporate enhanced AI features into its new devices, particularly iPhones and Macs. This requires a robust AI engine, which Perplexity could provide.
Potential Impacts
If Apple completes this acquisition, it would not only elevate its AI capabilities but also:
- Bring Siri to the level of competitors like ChatGPT and Google Gemini.
- Redefine Safari as an AI-powered browser.
- Deepen AI integration across platforms such as iOS, macOS, and Vision Pro.
