Apple Weighs Record-Breaking Bid for Perplexity AI as It Scrambles to Catch Up in the Generative Race
Apple is considering its largest acquisition to date: a multibillion-dollar purchase of Perplexity AI, an emerging search-centric generative-AI company currently valued near US $14 billion. Senior executives have held preliminary talks about the deal as the iPhone maker searches for a faster route to competitive artificial-intelligence capabilities.
Why Perplexity?
Perplexity operates an answer-engine that combines large-language-model reasoning with real-time web indexing, presenting query responses alongside citations. The service has grown rapidly and is viewed as a bridge between today’s chatbots and tomorrow’s AI-native search tools. For Apple, acquiring the San Francisco-based start-up would bring proprietary technology, a recognised consumer brand and a pool of AI researchers at a time when in-house development has lagged rivals.
Strategic Pressures
Apple’s generative-AI rollout, branded “Apple Intelligence,” relies on external models such as OpenAI’s ChatGPT for complex prompts, an arrangement critics see as clear evidence of internal gaps. Meanwhile, a U.S. antitrust verdict has cast doubt on Apple’s long-standing agreement that makes Google the default search engine in Safari, threatening a revenue stream estimated at more than US $20 billion a year. Strengthening a home-grown, AI-driven search layer could offset any fallout if regulators force changes to that deal.
The Price Tag
If Apple pays anything close to Perplexity’s most recent valuation, the transaction would eclipse its US $3 billion Beats Electronics purchase in 2014 by a wide margin, signalling a break from Apple’s traditionally conservative M&A playbook. The company sits on more than US $160 billion in cash and marketable securities, giving it ample firepower for a high-stakes bid.
Alternative Scenarios
Sources familiar with the discussions say Apple is also evaluating a strategic partnership instead of a full buy-out. Such an arrangement could integrate Perplexity’s technology into Safari and Siri while avoiding regulatory scrutiny and preserving the start-up’s independent momentum. Apple has historically favoured smaller “acqui-hire” deals and bespoke licensing agreements when expanding into new categories.
Competitive Landscape
Tech giants are racing to shore up their AI stacks. Microsoft doubled down on OpenAI; Google recently folded its Gemini models across Workspace; and Meta agreed to a multibillion-dollar pact with Scale AI after reportedly eyeing Perplexity earlier this year. Apple’s deliberations underscore the speed at which generative platforms are crystallising into must-have assets rather than experimental add-ons.
What’s Next?
No formal offer has been made, and Perplexity has publicly downplayed talk of ongoing negotiations. However, industry analysts note that Apple’s senior-level involvement, including M&A chief Adrian Perica and services head Eddy Cue, suggests the company views Perplexity as a credible solution to its AI gap. Regulators and investors alike will watch closely: for Apple, the decision could shape the future of Siri, Safari search and the broader Apple Intelligence ecosystem for years to come.
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