Meta Platforms (META) in Talks to Acquire Perplexity AI—Here’s Why It Matters
Meta's latest power play? Snatching up AI upstart Perplexity in what could be a billion-dollar chess move against rivals.
Why Perplexity? The AI dark horse has been quietly outmaneuvering Big Tech's clunky chatbots with razor-sharp search tech. Now Zuckerberg's empire wants that edge—and is willing to write the check.
The deal math: With Meta's stock near all-time highs (thanks to those sweet, sweet ad dollars), they're playing monopoly money anyway. Another day, another acquisition to distract from the metaverse money pit.
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Instead, Meta announced earlier this month that it WOULD invest $14.3 billion in Scale AI, which allowed it to acquire a 49% stake in the company and value it at over $29 billion. As part of the deal, Scale’s CEO Alexandr Wang will join Meta to lead its new “superintelligence” division, which focuses on developing artificial general intelligence (AGI). For context, AGI refers to AI systems that can understand, learn, and apply knowledge across a wide range of tasks at a human-like level of intelligence. This move highlights Meta’s shift toward building more advanced AI systems that go beyond narrow task-based models.
Founded in 2016, Scale AI helps train generative AI models by connecting them with a large network of human experts. Meta’s significant investment in the company shows that CEO Mark Zuckerberg is determined to strengthen the company’s position in the AI market. And Zuckerberg is not the only one, as many other tech giants have invested heavily in AI startups ever since Microsoft’s blockbuster deal with OpenAI in 2023.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $707.16 per share implies that shares are almost fairly valued.
