Investors Demand Apple Dive Into AI—Buyouts or Bust in 2025’s Tech Arms Race

Wall Street turns up the heat on Cupertino’s cash hoard.

### ‘Innovate or Acquire’ Pressure Cooker

Apple’s shareholders aren’t subtle—they want the $3T titan to stop spectating and start splurging on AI startups. After watching rivals like Google and Microsoft lap them in generative AI, patience is wearing thinner than an iPhone 15’s bezels.

### The Trillion-Dollar War Chest Dilemma

With $180B in liquid assets gathering dust (and 0.0001% interest), analysts argue even a failed moonshot beats another stock buyback. ‘They’re acting like a boomer holding gold bars under the mattress,’ quipped one hedge fund manager.

### The Cynical Take

Nothing motivates Big Tech like FOMO—and nothing empties pockets faster than Silicon Valley’s version of keeping up with the Joneses. Tim Cook’s next keynote better include more than just another color variation for the Vision Pro.

Apple may be considering purchasing Perplexity AI

Considering Apple’s track record, it has not been too eager to make acquisitions or mergers, like most other tech companies.  However, Citigroup Inc. analyst Atif Malik argued that the company WOULD gain tremendously if it invested or bought a meaningful stake in AI firms. According to Malik, the company’s last significant acquisition was a $3 billion deal to buy Beats a decade ago.

Last month, reports suggested that the iPhone maker may be exploring a bid for the AI startup Perplexity AI, which could help bolster its talent pool and advance the development of an AI-powered search engine. Currently, Perplexity AI is worth over $14 billion. 

Wedbush analyst Dan Ives has backed the idea of the tech firm acquiring Perplexity, calling it a “no-brainer.” He added that the investment would be worthwhile even if the tech giant had to pay $30 billion for it.

So far, Apple’s stock has dropped 16% this year, with its recent AI launches, even those showcased at the Worldwide Developers Conference, falling flat with investors. 

The company also recently lost its appeal in court, failing to prevent a ruling that permits developers to provide alternative purchase links outside the App Store without paying commission. The company has contested US District Judge Yvonne Gonzalez Rogers’ ruling, stating that it would result in“grave irreparable harm” for its operations. The company is also disputing her finding that it failed to comply with a 2021 injunction. Meanwhile, several developers, including Epic, Amazon, and Spotify, have already modified their apps to allow users to bypass Apple’s payment methods.

Cook says Apple should hire more AI expertise like Meta Platforms Inc

Unlike Apple, Meta has seen a more positive outcome with its AI offerings. The company is setting its sights on more aggressive investments in AI. 

Kevin Cook, a senior stock strategist at Zacks Investment Research, has asked the iPhone maker to follow Meta’s lead, encouraging it to recruit more AI experts. He, however, maintains that he feels Apple’s AI failures are being overstated and hence does not advocate for the company to make any big alterations.

He commented, “A refocus on AI talent is what’s needed. Apple certainly has challenges, but this isn’t like Google, which could more easily have been usurped by competitors if it fell behind.” 

Meta CEO Mark Zuckerberg has actively sought to boost the company’s AI talent. According to Bloomberg, he extended a lucrative offer, worth hundreds of millions, to Apple’s AI models team, which Apple chose not to match. 

The iPhone firm recently lost a key artificial intelligence executive to rival Meta Platforms Inc., damaging its generative AI ambitions.

Ruoming Pang, a distinguished engineer and head of Apple’s foundation models team, is joining Meta’s newly established superintelligence group, according to people familiar with the matter. Pang came to Apple in 2021 from Alphabet and led a team of around 100 engineers working on the large language models powering the company’s “Apple Intelligence” features across its devices.

Meta also pledged a $14.3 billion investment in Scale AI. Still with over $133 billion in cash and marketable assets at the end of March, the iPhone maker remains well-positioned to rival Meta in AI investment, boasting nearly twice as much liquidity.

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