Apple and Meta Eye Perplexity AI: A New AI Powerhouse?

In Silicon Valley, staying ahead of the competition is paramount. When major players like Apple and Meta find themselves lacking in talent or unable to develop technology in-house, they often turn to acquisitions. This approach has been a hallmark of the tech industry, with some companies making blockbuster deals and others facing setbacks. Last week, both Apple and Meta made headlines with their interest in acquiring Perplexity AI, a leading AI startup founded by Indian-origin computer scientist Arvind Srinivas.

Bloomberg first reported that Meta approached Perplexity about a potential takeover before the company recently invested $14.3 billion in Scale AI. Apple, known for its preference to build in-house, is also reportedly interested in Perplexity. This unusual move could signal a significant shift in Apple’s AI strategy, especially after a lackluster showing at its recent developers’ conference.

The Rise of Perplexity AI

Founded in 2022 by a team of AI researchers and machine learning experts, Perplexity AI aimed to 'democratize access to knowledge.' Initially dismissed as an 'AI wrapper,' the startup has since gained traction with its AI-driven search engine and chatbot. Perplexity’s strength lies in its ability to integrate multiple large language models (LLMs), including its own LLM called Sonar. This flexibility has helped the company attract around 15 million users and gain recognition as a serious search engine contender.

Perplexity's rise is particularly noteworthy as it challenges Google’s dominance in the search market. Users have increasingly complained about low-quality and spammy search results on Google, leading many to turn to platforms like Reddit and TikTok for more authentic answers. While Perplexity and ChatGPT have not yet replaced Google, there are growing signs that user search behavior is shifting.

Apple and the AI Race

Apple, once a leader in AI with Siri, has fallen behind in the current AI race. The company’s recent Worldwide Developers Conference (WWDC) keynote mentioned little about AI, highlighting its struggle to keep up with the generative AI boom. However, Apple is developing a new version of Siri based entirely on LLMs, aiming to make it more conversational and better at processing information.

Apple’s business model differs from other major AI players. While companies like Meta and Google focus on internal development, Apple is more open to partnerships, such as its collaboration with OpenAI. By combining its own machine learning models with generative AI technologies from partners, Apple aims to deliver advanced AI features within its products. With billions of active users and top-tier hardware, Apple could significantly enhance its AI capabilities through strategic partnerships.

Meta’s Ambitions in AI

Meta, on the other hand, has been on a shopping spree, investing heavily in AI startups. The company’s recent investment in Scale AI and its interest in Perplexity underscore its commitment to advancing AI. By acquiring or investing in promising AI startups, Meta aims to stay at the forefront of the AI revolution and challenge competitors like Google and Microsoft.

The potential acquisition of Perplexity by either Apple or Meta could have far-reaching implications. Perplexity’s innovative approach to integrating multiple LLMs and its growing user base make it a valuable asset. Whether Perplexity is up for sale and how close either company is to a deal remains unclear, but the tech world is watching closely.

In conclusion, the interest from both Apple and Meta in Perplexity AI highlights the intense competition in the AI space. As tech giants vie for dominance, the acquisition of innovative startups like Perplexity could be the key to staying ahead in the race.