Report: Apple considers acquiring AI startup Perplexity.

Apple has reportedly been in discussions about acquiring the artificial intelligence startup Perplexity AI, as stated in a recent Bloomberg report. Leading Apple figures involved in the AI initiative at Apple Park, including Adrian Perica, head of mergers and acquisitions, and Eddy Cue, senior vice-president of Services, were said to have participated in these talks.

Perplexity AI, known for its AI-powered search engine utilizing a large language model (LLM), processes information efficiently and presents it in a user-friendly manner. However, reports indicate that these discussions are in their early stages and may not necessarily result in a formal offer to acquire the company. Apple executives have not engaged in direct bid discussions with Perplexity’s management.

Despite speculation about a potential acquisition, Perplexity itself has stated, “We have no knowledge of any current or future M&A discussions involving Perplexity,” according to Reuters. Having recently been valued at $14 billion in a funding round, an acquisition by Apple would mark the largest in the company’s history, surpassing the $3 billion purchase of Beats in 2014.

This development coincides with Apple’s efforts to enhance the AI search capabilities of Safari and Siri. Concurrently, Samsung Electronics, a major competitor to Apple, is reportedly close to reaching an agreement to invest in Perplexity. If successful, this deal would potentially integrate Perplexity’s applications and assistant into future Samsung devices, as well as incorporate its search features into the Samsung web browser.

Amidst these discussions, Apple must prepare for a future without Google search, as the tech giant pays Apple approximately $20 billion annually to serve as the default search engine on Apple devices. However, this arrangement is under scrutiny in an ongoing antitrust case in the US. Apple may need to provide users with more search engine options while strategizing to offset the $20 billion it receives from Google through its own search advertising avenues.

Eddy Cue of Apple recently testified in the antitrust case, indicating a decline in Safari search queries for the first time as users shift towards AI services like ChatGPT, Perplexity AI, Anthropic, Deepseek, and Grok for their search needs. Furthermore, a Bloomberg report revealed Meta’s interest in Daniel Gross, founder of AI company Safe Superintelligence. Gross had developed the search engine Cue, which Apple acquired in 2013, and had been a prominent figure in Apple’s machine learning endeavors. Apple has reportedly attempted to recruit Gross to join their team.