According to informed sources, Adrian Perica, head of mergers and acquisitions, has discussed this idea with services chief Eddy Cue and key AI strategists. The talks are still in preliminary stages and might not result in a formal offer, as these individuals opted to remain anonymous due to the confidential nature of the situation.
Such an acquisition could aid Apple in developing an AI-driven search engine, particularly as they face the risk of losing a long-standing partnership with Google. The arrangement, which designates Google as the default search engine on Apple devices, brings in approximately $20 billion annually for Apple and now faces scrutiny from U.S. antitrust regulators.
To this point, Apple executives have not broached the topic of a bid with Perplexity management. Earlier reports from Bloomberg indicated that Meta Platforms Inc. attempted to acquire Perplexity earlier this year.
“We have no knowledge of any current or future M&A discussions involving Perplexity,” the AI startup stated. Apple has opted not to comment.
The Perplexity service delivers instantaneous answers to inquiries based on the most current information available online. If Apple were to pursue negotiations for the startup, it would likely wait until the conclusion of the Google antitrust trial, which will clarify the future of its profitable agreement with Google.
Following news of Apple’s discussions concerning Perplexity, Google shares reversed earlier gains, dipping nearly 1% in after-hours trading.
Perplexity recently completed a funding round valued at $14 billion. Any acquisition approaching that figure would represent Apple’s largest purchase to date. The most significant prior transaction for Apple was the $3 billion acquisition of Beats in 2014, although they have also executed billion-dollar deals for Intel Corp.’s modem unit and a stake in Chinese ride-sharing firm DiDi.
After Meta’s negotiations with Perplexity fell through, it acquired a 49% stake in Scale AI for $14.3 billion. This initiative is part of Meta’s strategy to establish a superintelligence AI team, which will now incorporate Scale co-founder Alexandr Wang.
Both Apple and Meta are engaged in a broader competition for talent. Recently, Meta has been in talks to recruit Daniel Gross, co-founder of AI company Safe Superintelligence Inc. While these discussions are advanced, Apple is also trying to persuade him to join them instead.
In 2013, Gross sold a startup named Cue to Apple, a move that laid the groundwork for several early AI features in iOS, the iPhone’s operating system. One of Gross’s co-founders at Cue, Robby Walker, supervised the Siri voice assistant until this year and is now leading an Apple initiative known as Knowledge, aimed at developing a competitor to OpenAI’s ChatGPT that leverages data from the open web.
Gross has not yet responded to a request for comment.
Perica and Eddy Cue, who both report to CEO Tim Cook, are spearheading the efforts to acquire and attract AI talent.
The initiative to recruit talent is part of a broader strategy to catch up in the field of generative AI. Apple has been slow to launch its Apple Intelligence platform and is currently behind competitors in several critical features. A revamped version of Siri has faced indefinite delays, with plans now set for its release by next spring.
At the recent Worldwide Developers Conference, Apple unveiled a relatively modest array of new AI features, including live translation capabilities and an expanded partnership with OpenAI on ChatGPT-based image generation.
Acquiring Perplexity would provide Apple with an infusion of AI expertise, a recognized brand in the AI sector, and a consumer product. Such a deal could also enhance future recruiting efforts.
Apple has contemplated an alternative strategy: collaborating with Perplexity rather than pursuing a purchase. A partnership might involve incorporating Perplexity as an AI search engine option within Apple’s Safari web browser and integrating it with Siri.
In recent months, Apple has held multiple meetings with Perplexity and its AI team has been actively assessing the company’s technology — indicating that a close relationship is being considered.
A significant obstacle to this process could be a potential deal between Perplexity and Samsung Electronics Co., which is expected to announce a substantial partnership with the startup. Samsung is Apple’s main competitor in the smartphone market, and AI functionalities have become an essential battlefield for both companies.
In its statement, Perplexity mentioned that it is not surprising for leading manufacturers to seek to provide the “best search and more accurate AI for their users.”
“That’s Perplexity,” the startup added.
Cue, who oversees Apple’s streaming services and iCloud, has previously expressed interest in Perplexity. During testimony at the Google antitrust trial in May, he told jurors that the industry is evolving away from traditional internet searches to AI-driven tools. He discussed a scenario in which AI search engines could quickly surpass Google’s existing services.
“We’ve been pretty impressed with what Perplexity has done, so we’ve started some discussions with them about what they’re doing,” he noted.
