Apple Eyes $14 Billion Acquisition of AI Startup Perplexity

Apple Inc. executives have reportedly engaged in internal discussions regarding a potential acquisition of AI startup Perplexity. These talks are in the early stages and have not yet involved Perplexity’s management. Adrian Perica, Apple’s head of mergers and acquisitions, is said to have brought up the idea with services chief Eddy Cue and other top AI decision-makers within the company. The tech giant is reportedly planning to integrate AI-driven search tools, similar to those offered by Perplexity, into its Safari browser.

Perplexity recently concluded a funding round that valued the company at $14 billion. An acquisition at or near this valuation would mark Apple’s largest deal to date, surpassing its $3 billion purchase of Beats Electronics in 2014. Apple has previously made significant acquisitions, including deals with Intel’s modem unit and Chinese ride-hailing platform DiDi.

Earlier attempts by Meta Platforms to acquire Perplexity were unsuccessful. Following this failed bid, 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 also been in advanced talks to hire Daniel Gross, co-founder of Safe Superintelligence Inc., while Apple is reportedly making efforts to persuade him to join its team. Gross 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.

While a full acquisition is being considered, Apple has also explored the possibility of partnering with Perplexity. One proposed arrangement involves 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, noted that the industry is “shifting away from standard internet searches to AI tools.” He added, “We’ve been pretty impressed with what Perplexity has done, so we’ve started some discussions with them about what they’re doing.”

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 challenges in partnering with Perplexity due to a reported in-progress agreement between Perplexity and Samsung Electronics. The South Korean firm, a competitor in smartphones, is planning to announce a major partnership with the AI startup. Any exclusive deal with Samsung could potentially hinder Apple’s AI ambitions. A spokesperson for Perplexity commented, “It shouldn’t be surprising that top manufacturers want to offer the best search and more accurate AI for their users. That’s Perplexity.”

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