Perplexity denies any ongoing acquisition talks with Apple
What's the story
Perplexity, an artificial intelligence (AI) search start-up, has denied any ongoing merger or acquisition discussions with tech giant Apple. The denial comes after a Bloomberg report suggested that Apple was considering acquiring the start-up as part of its strategy to bolster its generative AI capabilities. Perplexity told Fortune India, "We have no knowledge of any current or future mergers and acquisitions (M&A) discussions involving Perplexity."
Clarification
Perplexity clarifies on partnership talks
Perplexity also clarified its stance on possible partnership talks with Apple. The company said, "It shouldn't be a surprise that the best OEMs in the world want to offer the best search and most accurate AI for their users, and that's Perplexity." This statement was in response to speculation about potential collaborations in search technology or evaluations of their tech stack by Apple.
Acquisition talks
Previous report on Apple's interest in Perplexity
The Bloomberg report had revealed that Apple executives, including M&A chief Adrian Perica and services head Eddy Cue, were interested in acquiring Perplexity. The discussions are said to be at an early stage but are part of Apple's larger plan to bolster its generative AI capabilities. This comes amid concerns over the company's multi-billion-dollar search deal with Google.
Strategic shift
Apple's push for generative AI
The pressure on Apple to accelerate its AI efforts has increased in recent months. This is mainly due to the US Department of Justice (DOJ)'s antitrust lawsuit against Google, which could jeopardize the long-standing agreement that makes Google the default search engine on Apple devices. The deal is estimated to bring around $20 billion annually to Apple. To counter potential disruptions, the iPhone maker is considering alternatives such as building its own AI-powered search engine.
Market presence
What is Perplexity?
Perplexity or Perplexity AI, founded by former OpenAI researcher Aravind Srinivas, is a leading player in the AI search space. In May, reports suggested that it was in advanced talks to raise $500 million at a $14 billion valuation with venture capital firm Accel leading the round. Despite being early in its revenue journey with less than $100 million in annual recurring income, the company's impact and user adoption have grown rapidly.
Scenario
Competing against major industry players
Perplexity is emerging as a strong player in the rapidly shifting AI search landscape. The company is now taking on major names like Google, Microsoft, OpenAI, and Anthropic, all of which have recently launched or enhanced their AI-driven search tools. Perplexity stands out with its focus on precise, conversational, and ad-free results powered by large language models. This is helping the company draw interest from both enterprise users and OEMs looking for advanced alternatives to conventional search engines.