Meta and Apple explore acquisition talks with AI startup Perplexity

In early discussions, two major tech companies, Meta and Apple, showed interest in acquiring Perplexity, a nearly three-year-old AI startup based in the United States. These negotiations took place as both companies face pressure from competitors like Google and OpenAI, who are advancing rapidly in the AI field. According to sources, Meta initiated contact with Perplexity about a potential acquisition, but a deal was not concluded. Meanwhile, Apple held internal talks about acquiring the startup, which were considered to be in the preliminary stages and might not lead to a final agreement. Perplexity is known for its AI search engine that not only provides answers to searches but also handles project tasks, such as creating travel itineraries or playlists. In addition, the company offers a free tier with limited search capabilities and has been compared to popular AI services like ChatGPT. The context surrounding these discussions reveals that both Meta and Apple are perceived to be lagging in their AI products and services, leading to a sense of urgency to enhance their capabilities. The tech industry continues to see a fierce battle for AI talent, with reports indicating that Meta has even offered compensation packages reaching up to $100 million to attract top professionals. Furthermore, Meta has also made significant investments in startups like Scale AI to improve data labeling and training for their AI models. As they navigate these developments, both companies recognize the critical importance of AI for their future success and are seeking ways to solidify their leadership in the evolving tech landscape. The potential acquisition of Perplexity could benefit Apple significantly by integrating AI capabilities into its products, including its Safari browser, where Apple plans to incorporate an AI-powered search engine. With Google currently being the default search engine in Safari, a partnership with Perplexity might offer Apple a chance to improve their search functionalities and enhance the relevance of their services. Despite the ongoing talks, the CEO of Perplexity, Jesse Dwyer, remains non-committal about these discussions, stating that the company has no knowledge of any upcoming mergers or acquisitions. Overall, this situation illustrates the increasing competition in the AI industry and the lengths to which major tech companies are willing to go to catch up and innovate amidst a rapidly evolving market. As these talks unfold, they exemplify a broader trend of consolidation in the technology sector, where emerging AI startups could play pivotal roles in shaping the future of digital services.