Apple exceeded Wall Street expectations in its latest earnings call, but perhaps the Achilles' heel for the tech giant so far has been its approach to AI.
Apple has been seen by many — including Tom's Guide — as trailing the likes of Google, OpenAI and even Microsoft when it comes to implementing useful AI solutions into its products. Well, that could be about to change.
We’re open to M&A that accelerates our roadmap.
Tim Cook, Apple CEO
According to CNBC, Tim Cook told investors the company plans to "significantly grow our investments" when it comes to AI. Considering how far Apple is behind on Siri, which won't be getting promised features until 2025, acquiring a larger AI company seems like a smart move.
“We’re open to M&A [mergers and acquisitions] that accelerate our roadmap,” Cook said, noting that Apple had acquired around seven companies so far this year. He qualified that by saying none had been "huge in terms of dollar amount."
The bullish comments come at a time when other companies are spending huge amounts on AI acquisitions. For instance, Meta has paid $14.3 billion — its largest ever investment — to acquire a 49% stake in Scale AI, a San Francisco data annotation company. Meanwhile, Microsoft has become only the second company after Nvidia hitting hit a $4 trillion valuation. Largely thanks to Azure and AI.
Could Apple buy Perplexity?
Forrester’s VP principal analyst Dipanjan Chatterjee said that Apple getting serious on AI spend is an admission that it's fallen behind the tech pack. And he suggests that Perplexity could be in the company's sights.
This is something we've heard before, specifically from a Bloomberg report claiming Apple's head of M&A, Adrian Perica, is interested in the AI company.
“Apple's AI urgency is palpable, and there is a quiet admission of its sluggishness in the acknowledgement that it may have to lean heavily on acquisition to compress timelines," Chatterjee said.
"Rumors swirl about a Perplexity deal, and if that were to happen, it may greatly accelerate the elusive promise of a more effective Siri."
Acquiring or partnering with Perplexity would make sense for Apple as it could integrate Perplexity's tech into making Siri smarter now that Apple's planned AI revamp for its assistant has been pushed into 2026.
If the deal came, it'd be Apple's biggest ever acquisition. Perplexity is valued at around $14 billion, which towers above Apple's biggest deal to date: buying Beats for $3 billion back in 2014.
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