Apple Faces Pressure to Boost AI Strategy Amid Share Slump

Apple investors are calling for the company to reboot its AI strategy, considering a big acquisition and more aggressive talent pursuit. The company's share slump has erased over $630 billion in market value this year, with investors disappointed in the delay of AI features. Analysts suggest acquiring an established AI provider or investing in one, like Perplexity AI, to invigorate Apple's AI efforts.

Apple investors are calling for the company to reboot its AI strategy, considering a big acquisition and more aggressive talent pursuit. The company's share slump has erased over $630 billion in market value this year, with investors disappointed in the delay of AI features. Analysts suggest acquiring an established AI provider or investing in one, like Perplexity AI, to invigorate Apple's AI efforts.

According to Dan Ives of Wedbush Securities, Apple needs to acquire the $14 billion startup Perplexity to catch up and ultimately prevail in the AI race [1]. While Apple has an advantage due to the popularity of its iPhone and other iOS devices, it ultimately needs to look outside instead of building out an AI product in-house, Ives wrote in a Wednesday note.

Apple is falling behind in the AI race, and the only way it can catch up is by buying the AI startup Perplexity, according to a top analyst. Dan Ives of Wedbush Securities said it’s clear Apple is incapable of producing its own AI in-house, despite a company culture that strives to build superior products internally. In recent days, some of Apple’s top AI talent has also been poached by increasingly aggressive AI talent recruiter Meta, Bloomberg reported [1].

Meanwhile, competitors are increasingly outdoing the company. “Apple is at a highway rest stop on a bench watching this 4th Industrial Revolution race go by at 100 miles an hour,” wrote Ives in a Wednesday note [1].

Even if Apple has to pay around double what it is currently worth, it should acquire Perplexity, Ives wrote. The San Francisco-based startup, reportedly worth $14 billion, has made strides among AI enthusiasts for citing links to articles and other information when its AI responds to queries. Perplexity on Tuesday also launched Comet, an AI-based web browser, for select subscribers, in its latest effort to compete with tech giants Google and Microsoft [1].

However, acquiring Perplexity would come with privacy considerations for Apple. The company is used to providing end-to-end encryption for products like iMessage and FaceTime, and would need to find a solution for how Perplexity would run, either locally or on a secure cloud architecture [1].

Apple's recent WWDC, its annual event for showcasing new tech, also “was a snoozer,” Ives wrote, and barely mentioned AI [1]. Apple’s AI strategy may be changing, with the company considering acquiring Perplexity AI to boost its AI strength. This move could help Apple if it loses its $20B deal with Google. Perplexity may power Safari’s search, giving Apple a new edge in AI [2].

Apple must take the lead, not just catch up. Apple’s decision to acquire Perplexity could be a significant turning point rather than just another acquisition. It provides Apple with a clever AI search engine, a fallback option if the Google deal falls through, and a means of regaining its position as a genuine leader in AI [2].

References:
[1] https://fortune.com/2025/07/09/apple-ai-acquisition-perplexity-dan-ives-wedbush/
[2] https://true-tech.net/apple-to-buy-perplexity-ai/