Apple execs in early-stage talks to acquire Perplexity AI

Apple executives are exploring an acquisition of Perplexity AI, a startup focused on AI-driven real-time question answering.

The talks are still at an early stage and may not lead to a formal bid.

Adrian Perica, Apple’s head of mergers and acquisitions, and Eddy Cue, head of services, are involved in the discussions.

Apple has not yet approached Perplexity’s management.

The startup, recently valued at US$14 billion, says it is unaware of any talks with Apple but is in negotiations with Samsung for a potential partnership.

If pursued, this would be Apple’s largest acquisition, surpassing its US$3 billion purchase of Beats in 2014.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Apple’s unprecedented acquisition size signals strategic AI urgency

Perplexity’s $14 billion valuation would make this potential acquisition dramatically larger than any in Apple’s history, surpassing even the $3 billion Beats deal from 2014 that previously held the record 1.

This represents a significant departure from Apple’s typical AI acquisition strategy, which has historically focused on smaller, targeted purchases around the $200 million range, including Turi (2016) and Lattice Data (2017) for machine learning capabilities 2 3.

Apple’s willingness to consider such a massive transaction reflects both the heightened stakes in the AI race and the potential impact of losing the Google search deal that currently generates $20 billion annually 4.

This acquisition would be nearly five times larger than Apple’s previous record purchase, indicating the company may be shifting from its traditional approach of buying small teams to a strategy of acquiring established AI platforms with existing users and technology.

2️⃣ The evolving search landscape presents both risk and opportunity

Apple’s interest in Perplexity comes at a critical moment when its lucrative Google partnership faces significant legal uncertainty.

In 2021, Google paid Apple over $26 billion for search placement deals, with approximately $20 billion specifically for Safari browser placement—revenue now threatened by the federal ruling that Google maintains an illegal monopoly over online search 4.