Why both Apple and Meta are interested in buying Perplexity AI...
In Silicon Valley, staying ahead of the competition is crucial for companies like Apple and Meta. When faced with a shortage of talent or the inability to develop technology in-house, the typical approach is to make significant acquisitions. This involves acquiring successful companies, absorbing the team responsible for the product, and either integrating it into existing offerings or allowing the founders to continue innovating independently. Many Silicon Valley companies have adopted this approach, with some making successful acquisitions while others have faced challenges.
Interest from Apple and Meta
Last week, both Apple and Meta made headlines by expressing their interest in acquiring Perplexity AI, a prominent AI startup founded by Indian-origin computer scientist Arvind Srinivas. While major players in Silicon Valley often operate discreetly when pursuing company acquisitions, this time, both tech giants are eyeing Perplexity simultaneously. The timing of this interest adds an intriguing dimension, especially for Apple, known for its preference to develop technologies in-house rather than seeking external talent.
Bloomberg initially reported Meta's approach to Perplexity regarding a potential takeover before the company's significant investment of $14.3 billion in Scale AI. Similarly, another Bloomberg report revealed that Apple also had its sights set on Perplexity. However, it remains unclear whether Perplexity is open to a sale, if formal acquisition talks have taken place with Meta or Apple, or how close either company is to finalizing a deal. The official announcement may shed more light on the situation.
Rise of Perplexity AI
Founded in 2022 in San Francisco by a team of AI researchers and machine learning experts, including Aravind Srinivas, Andy Konwinski, Denis Yarats, and Johnny Ho, Perplexity AI initially aimed to democratize access to knowledge. Despite early skepticism labeling it as just an "AI wrapper," the startup gained traction with its AI-driven search engine and chatbot.
Central to Perplexity's success is its offering of powerful large language models (LLMs) for users to choose from, in addition to its proprietary LLM called Sonar. By rapidly developing and launching new features on top of popular LLMs, Perplexity attracted a user base of around 15 million users by mid-2024.
Perplexity's unexpected emergence as a serious contender in the search engine space has garnered praise from insiders and the public alike. The platform's search capabilities have been commended, with some considering it a potential rival to Google's dominance in the market. Amidst attempts by various companies to replicate Google's success, Perplexity's distinct approach has resonated with users, highlighting a shift in search behavior and the emergence of new players.
Apple's AI Strategy
While Cupertino initially led in artificial intelligence with Siri in the early 2010s, Apple now lags behind other tech giants in the current AI landscape. Apple's AI offerings, including Apple Intelligence and Siri, have received mixed reviews, with promises of overhauls yet to materialize. The recent WWDC keynote underscored Apple's minimal emphasis on AI, indicative of potential shortcomings in anticipating AI advancements.
Apple's approach differs from competitors in its emphasis on partnerships, such as its collaboration with OpenAI. By integrating generative AI technologies with its own machine learning models, Apple aims to enhance features within Apple Intelligence. This partnership-driven strategy allows Apple to leverage its hardware and large user base effectively, positioning itself uniquely in the AI space.
Potential Acquisition of Perplexity AI by Apple
Speculation surrounding Apple's interest in acquiring Perplexity AI signifies a strategic shift in its AI approach. The compatibility between both entities suggests promising prospects for integrating Perplexity's technology with Apple's ecosystem. Perplexity's search tool aligns well with iOS, suggesting a seamless user experience if integrated.
Perplexity AI's innovative search engine, focusing on natural conversation and transparency, offers a compelling alternative to traditional search engines like Google. By transforming search into a dialogue and providing direct links to sources, Perplexity enhances user engagement and information accessibility.
As Apple explores opportunities to reduce reliance on Google and enhance its AI offerings, the potential acquisition of Perplexity AI represents a strategic move towards shaping the future of Apple Intelligence. While regulatory hurdles may pose challenges, the long-term benefits of integrating Perplexity's technology could be transformative for Apple's AI capabilities.
