Report: Apple held internal talks about acquiring AI search startup Perplexity

As Apple scrambles to play catch-up in the generative AI race, a new report says the company has considered making its biggest acquisition ever.

According to Bloomberg, Apple executives have held internal discussions about a potential bid for Perplexity AI, the fast-growing AI startup known for its conversational web search platform.

This would mark Apple’s biggest acquisition ever

As reported by Mark Gurman, the talks are still at an early stage and may not result in an actual offer, but the idea has reportedly been floated between Apple’s mergers and acquisitions lead Adrian Perica, services chief Eddy Cue, and top AI leadership inside the company.

Perplexity recently closed a funding round that valued it at $14 billion, which would make its acquisition an unprecedented move for Apple, well above the $3 billion Beats deal in 2014.

Here’s Gurman on the possible acquisition:

“Buying Perplexity would give Apple an infusion of AI talent, a known brand in the AI space and a consumer product. A deal could also potentially assist with future recruiting efforts.”

While the report says Apple has held multiple meetings with Perplexity in recent months, and its internal AI teams have been evaluating the technology closely, Apple declined to comment, and Perplexity said it has “no knowledge of any current or future M&A discussions”.

The case for buying Perplexity

First, there’s the looming threat of Apple’s $20 billion-a-year search deal with Google being unwound following the US government’s ongoing antitrust case. Eddy Cue himself hinted at this during his testimony earlier this year, as he claimed that the industry is pivoting away from traditional web search toward AI-driven answers.

Second, Perplexity already has what Apple lacks: a consumer-facing AI search product with real-time web access and name recognition in the AI space, at a much lower (although still astronomical) price than direct competitors like, say, OpenAI. Perplexity even has its own iPhone assistant that, despite the system’s intentional limitations, does way better than Siri and ChatGPT at multiple tasks.

Which maybe is why beyond a full-blown acquisition, Apple is also said to be exploring a potential partnership, one that could see Perplexity integrated into Safari as a search option or baked into Siri responses.

One big wrinkle: Samsung. The report says Samsung is close to finalizing its own major partnership with Perplexity, which could make any exclusive Apple deal more complicated. It is worth mentioning that Bloomberg reported earlier today that Meta has also held acquisition discussions with Perplexity, although it seems to have given up on the idea and moved on to its recent $14B investment in Scale AI instead.

Do you think Apple should buy Perplexity? If not them, who do you think Apple should acquire? Let us know in the comments.