Apple reportedly in early talks to acquire AI startup Perplexity

Apple executives have reportedly held early internal discussions about a potential bid for AI search startup Perplexity, according to Bloomberg News, signalling that the tech giant may be gearing up for a major move in the increasingly competitive artificial intelligence space.

Citing sources familiar with the matter, the report notes that the conversations are preliminary and that no official offer has been made.

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Notably, Apple has yet to approach Perplexity's management, and the AI startup has denied any awareness on such discussions, the report added.

"We have no knowledge of any current or future M&A discussions involving Perplexity," the company said in response to a Reuters query. Apple has not publicly commented.

The news comes as Big Tech players intensify their bets on generative AI to fuel next-generation digital services. Meta, for instance, attempted to acquire Perplexity earlier this year and recently invested $14.8 billion in Scale AI, bringing in its CEO Alexandr Wang to spearhead a new "superintelligence" initiative.

Perplexity, backed by Nvidia, is among the AI firms gaining traction for offering conversational search experiences. Its tools generate summarized answers to use queries, challenging the dominance of traditional search engines.

The startup recently closed a funding round at a reported $14 billion valuation, putting it on the radar of tech giants looking to future-proof their search offerings.

According to Bloomberg, Apple's head of M&A Adrian Perica has weighed a possible deal with senior executives including services chief Eddy Cue and AI leaders. The iPhone maker is said to be exploring ways to embed AI-powered search functionality, similar to Perplexity's capabilities, directly into its Safari browser - potentially reducing reliance on Google, whose search engine has long been Safari's default.

The timing is notable as U.S. antitrust regulators scrutinize Google’s market dominance. One proposed remedy by the Department of Justice includes prohibiting Google from paying companies to prioritize its search engine - a practice that Apple has benefited from for years, the report added.

Also Read: Scale AI's Alexandr Wang to join Meta's superintelligence mission; Jason Dorege to be interim CEO of startup