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Apple is scrambling to catch up in the race for generative AI, according to a new report. The company may have considered its largest acquisition ever.
A new report claims that Apple has considered making its biggest acquisition ever.Bloomberg () has reported that Apple executives have been in discussions internally about a possible bid for Perplexity AI. This fast-growing AI company is known for its conversational search platform.
This would be Apple’s largest acquisition ever.
According to Mark Gurman, talks are still in the early stages and may not lead to an actual offer. However, the idea has been floated by Apple’s mergers & acquisitions leader Adrian Perica, Services chief Eddy Cue and top AI leadership within the company.
Perplexity closed a funding round valued at $14 billion. This would make Apple’s acquisition of Perplexity an unprecedented move, far above the $3 billion Beats Deal in 2014. Gurman’s take on the potential acquisition:
“Buying Perplexity will give Apple a boost of AI talent and a well-known brand in the AI industry, as well as a consumer product. A deal could potentially help with future recruitment efforts.
The report claims that Apple has held several meetings with Perplexity over the past few months and its internal AI teams are evaluating the technology. Apple declined to comment and Perplexity stated that it had “no knowledge” of any current or upcoming M&A talks.
The case for purchasing Perplexity
Firstly, there is the looming danger that Apple’s $20 billion a year search deal with Google will be unwound due to the ongoing antitrust case by the US government. Eddy Cue hinted at this in his testimony earlier this summer, when he said that the industry was shifting away from traditional web searches to AI-driven answers.
Perplexity has what Apple does not: a consumer-facing AI product that offers real-time web access, name recognition, and AI-related information at a lower (but still astronomical price) than direct competitors such as OpenAI. Perplexity has its own iPhone assistant, which, despite its limitations, is far superior to Siri and ChatGPT in multiple tasks.
This could be why Apple is exploring a partnership that would see Perplexity integrated as a search feature in Safari or baked into Siri’s responses.
One big wrinkle: Samsung. The report claims that Samsung is close to finalizing a major partnership with Perplexity. This could complicate any exclusive Apple deal. Bloomberg reported that Meta had and also held acquisition discussions with Perplexity. However, it seems that Meta has given up the idea of acquiring Perplexity and instead moved on to its recent $14B investment in Scale AI.
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