Report: Apple has held internal discussions about acquiring Perplexity

Apple Inc. executives have held discussions about buying Perplexity AI Inc., Bloomberg reported today.

The publication cited sources as saying that the talks are in an early stage and may not lead to an acquisition. Perplexity reportedly received a $14 billion valuation in a recent funding round. To be accepted, any takeout offer made by Apple would likely have to be higher. 

San Francisco-based Perplexity operates a consumer-focused search engine powered by artificial intelligence models. Rather than returning a list of webpages in response to queries, the service generates a natural language response. It can also visualize stock price changes, analyze user-uploaded files and perform other tasks.

Perplexity had more than 15 million monthly users last April, a number that has likely increased significantly since then. The company recently disclosed that it processed 780 million user requests in May. Moreover, the volume of queries that it receives is growing by 20% every month.

Perplexity generates revenue by offering two paid editions of its search engine. The first, Perplexity Pro, gives users access to reasoning models from providers such as OpenAI. There’s also an Enterprise Pro plan geared towards large organizations.

Perplexity’s other revenue source is its Sonar suite of application programming interfaces for developers. Using the APIs, software teams can embed the core features of the company’s search engine into their custom applications.

Adrian Perica, Apple’s vice president of corporate development, has reportedly discussed the idea of buying Perplexity with a number of other executives. It’s believed the search provider wasn’t involved in the talks. However, Apple representatives did meet with Perplexity executives multiple times recently to discuss its technology.

Today’s report follows an unsuccessful attempt by Meta Platforms Inc. to acquire Perplexity. According to Bloomberg, the Facebook parent walked away from the deal over disagreements about financial terms. Meta later made a $14.3 billion investment in Scale AI Inc., a startup that supplies training datasets for AI development projects.

It’s believed that Apple could eventually decide to partner with Perplexity instead of buying it. Such an arrangement would likely cost significantly less. Additionally, it would have a lower chance of drawing scrutiny from antitrust regulators.

The acquisition discussions come against the backdrop of a high-profile antitrust trial over Google LLC’s search business. Currently, the Alphabet unit pays Apple billions of dollars annually to keep its search engine the default option on iOS. The lawsuit could potentially require the companies to end the payments. If that happens, Apple may be more inclined to partner with Google competitors such as Perplexity.

Perplexity is not the only AI startup that has drawn takeover interest. According to CNBC, Meta recently tried to buy Safe Superintelligence Inc., a company co-founded by former OpenAI Chief Scientist Ilya Sutskever. After the offer was rebuffed, the Facebook parent reportedly shifted its focus to recruiting the startup’s top executives.

Image: Unsplash

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