Apple explores Perplexity AI acquisition to bolster Siri and Search capabilities

New Delhi: Tech giant Apple is reportedly vying to acquire Perplexity AI, an artificial intelligence startup valued at $14 billion, as it scrambles to bolster its AI capabilities in an increasingly competitive market. 

The interest in Perplexity, founded in 2022 by Indian-origin computer scientist Aravind Srinivas and a team of AI experts, underscores the growing importance of AI-driven search and conversational technologies in reshaping the tech landscape.

According to Bloomberg, Apple executives, including head of mergers and acquisitions Adrian Perica and services chief Eddy Cue, have held internal discussions about a potential bid for Perplexity. The talks, though in early stages, reflect Apple’s urgency to catch up in the AI race, particularly after delays in rolling out its next-generation Siri and a lacklustre AI showcase at its recent Worldwide Developers Conference (WWDC). 

Earlier this year, Meta, led by CEO Mark Zuckerberg, had approached Perplexity about a possible takeover before pivoting to a $14.8 billion investment in Scale AI, another AI firm.

Perplexity AI, often described as a hybrid of Google Search and ChatGPT, has gained traction with its AI-powered search engine and chatbot, handling over 780 million queries monthly. Unlike traditional search engines, Perplexity delivers concise, source-backed answers and allows users to ask follow-up questions, offering a conversational experience that appeals to younger users. The startup’s ability to integrate real-time web search with natural language processing has made it a prime target for tech giants looking to challenge Google’s dominance in search and compete with Microsoft-backed OpenAI.

For Apple, acquiring Perplexity could serve multiple strategic goals. The iPhone maker is under pressure to reduce its reliance on a $20 billion annual deal with Google, which ensures Google Search remains the default on Safari but faces scrutiny from US antitrust regulators. Integrating Perplexity’s technology could enable Apple to develop its own AI-powered search engine, providing a fallback if the Google partnership unravels. Additionally, Perplexity’s AI could enhance Siri, which has lagged behind competitors like Amazon’s Alexa and OpenAI’s ChatGPT. 

Perplexity’s $14 billion valuation would make an acquisition Apple’s largest ever, surpassing its $3 billion purchase of Beats in 2014. However, Perplexity has stated it has “no knowledge of any current or future M&A discussions,” and no formal offers have been confirmed.