Apple is contemplating making an offer for AI startup Perplexity, according to reports.

Apple is reportedly considering acquiring Perplexity AI, an emerging AI startup, as a strategic move to enhance its AI capabilities and reduce its reliance on Google’s search arrangements amid concerns raised by U.S. antitrust regulators. The potential acquisition could see Apple assimilate Perplexity AI’s technology into its services, with internal discussions involving Apple’s mergers and acquisitions head, Adrian Perica, and key AI executives like Eddy Cue. So far, the talks are only exploratory, and Apple has yet to make any formal bids or reach out to Perplexity for negotiations.

Recent engagements between Apple and Perplexity have been centered on evaluating the technological prowess of the startup. In addition to an acquisition, exploring a partnership where Perplexity’s AI-driven search engine might be integrated into Apple’s Safari browser or Siri is also being considered. Perplexity’s assertion regarding any M&A discussions remains vague, emphasizing the absence of such engagements.

Eddy Cue, overseeing Apple’s services division, commended Perplexity’s work during the Google antitrust trial, indicating Apple’s interest in discussions with the company. The potential acquisition of Perplexity could enable Apple to develop its AI-powered search engine, particularly if its lucrative deal with Google, generating around $20 billion annually, faces regulatory scrutiny resulting in its termination.

With a recent valuation of $14 billion following successful fundraising, a deal around this figure would mark Apple’s most substantial acquisition to date, overshadowing its acquisition of Beats for $3 billion in 2014. However, industry reports suggest that Meta, formerly Facebook, had also contemplated acquiring Perplexity before opting to invest in Scale AI with $14.3 billion.

Despite the budding relationships with tech giants like Meta, Perplexity’s openness to partnerships illustrates an ongoing dialogue with Samsung, complicating potential arrangements with Apple. Perplexity reiterates the attractiveness of its cutting-edge AI and search offerings for major manufacturers keen on offering superior search services and precise AI experiences for users.

Given the AI potential reflected in Apple’s existing products like Siri, assistance from Perplexity can be incredibly beneficial towards enhancing Apple’s AI ambitions. The present landscape underscores the urgency for substantial upgrades to Siri, potentially facilitated through an alliance with Perplexity’s innovative technology, beneficial for both Apple and Perplexity.