Apple Eyes Game-Changing Move: Acquisition of AI Powerhouse Perplexity on the Table

Tech giant Apple is reportedly in talks to snap up artificial intelligence startup Perplexity—a move that could send shockwaves through the AI sector.

Why this matters: With AI becoming the new battleground for tech supremacy, Apple's potential acquisition signals an aggressive play to close the gap with rivals. The deal would instantly boost Apple's AI capabilities while denying competitors access to Perplexity's cutting-edge tech.

The finance angle: Because nothing says 'innovation' like throwing billions at a startup when your own R&D department hits a wall. Wall Street will lap this up as 'strategic vision' while quietly questioning why Apple didn't build this in-house.

What to watch: If this deal goes through, it could trigger a new wave of AI acquisitions as cash-flush tech giants scramble to buy rather than build the next generation of artificial intelligence tools.

Perplexity acquisition could be the largest-ever 

Perplexity recently closed a funding round that valued it at $14 billion. A deal approaching that value WOULD be Apple’s largest acquisition to date, surpassing its $3 billion purchase of Beats Electronics in 2014. The company also made billion-dollar deals with Intel’s modem unit and Chinese ride-hailing platform DiDi.

Bloomberg reported Friday that Meta Platforms had earlier tried to acquire Perplexity but failed to secure a deal. After that failed attempt, Meta acquired a 49% stake in Scale AI for $14.3 billion to build a “superintelligence” AI team. Scale co-founder Alexandr Wang is now part of that initiative.

Meta has reportedly been in advanced talks to hire Daniel Gross, co-founder of Safe Superintelligence Inc., while Apple is making efforts to persuade him to join its team. 

Gross had previously sold his startup, Cue, to Apple in 2013, which contributed foundational technologies for early AI features in iOS. His Cue co-founder, Robby Walker, oversaw Siri until recently and now leads Apple’s internal AI project codenamed “Knowledge,” meant to compete with ChatGPT, and created using web-based data.

Apple could go the partnership route

While a full acquisition is on the table, Apple has also discussed a possible partnership with Perplexity. According to sources, one proposed arrangement would involve incorporating Perplexity as an AI search engine option in Safari. Another would integrate the startup’s technology more deeply into Siri, Apple’s voice assistant.

Eddy Cue, speaking during the Google antitrust trial in May, said that the industry is “shifting away from standard internet searches to AI tools.”

“We’ve been pretty impressed with what Perplexity has done, so we’ve started some discussions with them about what they’re doing,” he added.

The iPhone Maker has met with Perplexity several times in recent months, and its AI team is actively assessing the startup’s technology. However, the company has not yet opened formal acquisition talks. 

Apple might face some problems partnering with the AI firm, owing to a reported in-progress agreement between Perplexity and Samsung Electronics. The South Korean firm, Apple’s competitor in smartphones, is planning to announce a major partnership with the AI startup. Any exclusive deal with Samsung could likely cripple Apple’s AI ambitions.

“It shouldn’t be surprising that top manufacturers want to offer the best search and more accurate AI for their users. That’s Perplexity,” a company spokesperson surmised.

BBC threatens legal action over copyright violations

As reported by Cryptopolitan, Perplexity is also facing legal troubles from the British Broadcasting Corporation (BBC). In a letter sent to Perplexity CEO Aravind Srinivas, the BBC accused the company of illegally scraping and storing large portions of its journalistic content for training its AI models.

The BBC demands that Perplexity immediately stop accessing its articles, erase any stored copies, and present a proposal for financial compensation. If the demands are not met, the BBC says it will seek an injunction to halt use of its content and potentially pursue damages.

“Perplexity’s tool directly competes with the BBC’s own services, circumventing the need for users to access those services,” the broadcaster stated in its letter.

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