In recent developments concerning artificial intelligence, a relatively young startup named Perplexity has garnered significant attention from two major tech companies: Meta and Apple. Founded about three years ago, Perplexity has emerged as an innovative player in the AI landscape, specifically with its advanced AI search engine capabilities. Reports indicate that Meta engaged in discussions with Perplexity about a potential acquisition. Although no deal was finalized, the dialogue, reportedly held in late April or early May, highlights the growing interest in AI ventures among established tech giants like Meta and Apple, both of whom recognize the potential significance of AI in shaping future digital landscapes.
According to sources cited by Bloomberg and The Information, the talks with Meta, albeit inconclusive, signal the competitive race for AI supremacy that both companies are currently engaged in. Separately, Apple has also shown interest in acquiring Perplexity, yet discussions at that time were still at an early stage and may not lead to a formal agreement. Such maneuvers come in response to industry sentiment suggesting that both companies are perceived to be lagging in their respective AI offerings when compared to leaders like Google and OpenAI. The urgency of the situation underscores a fierce rivalry to attract top AI talent, viewed by many as crucial to the next significant evolution of the internet.
In speaking with the media, Jesse Dwyer, head of communications for Perplexity, refrained from commenting on the discussions with Meta, maintaining that the company had no insight into any current or potential merger and acquisition talks involving Perplexity. Neither Meta nor Apple provided immediate remarks when approached by CNN for comments regarding these discussions.
To better understand the allure behind Perplexity, it is essential to explore what the company does. Launched in December 2022 after its formation in August of the same year, Perplexity specializes in an AI-driven search tool designed to parse web content effectively, delivering curated, summarized responses to user inquiries. The search engine operates in two main modes: quick search for general inquiries and pro search for more complex queries requiring deeper exploration. Users benefit from a free tier, allowing for three pro searches a day, while the paid tier, priced at $20 per month, provides access to unlimited features and additional AI models.
While Perplexity aims to facilitate user interactions with various AI models seamlessly, it also encompasses a host of additional functionalities. Users can inquire about specific files, manage projects like generating travel itineraries or playlists, and even create images tailored to different topics of interest. However, many of the advanced features lie within the paid subscription model. Notably, the platform is also developing a web browser named Comet.
Despite its growing traction, Perplexity faces stiff competition within the bustling AI sector dominated by established brands, such as OpenAI’s ChatGPT, which maintained a strong hold as a leading chatbot application. Recent reports indicate that ChatGPT accounted for a staggering 45% of all AI chatbot app downloads in the third quarter of 2024, relegating Perplexity to the “others” category in application downloads. Compounding these challenges is a substantial controversy involving content use. Several entities, including the BBC and Dow Jones, have threatened or initiated legal action against Perplexity, claiming unauthorized use of their content.
A potential acquisition would serve to bolster either Apple’s or Meta’s existing AI initiatives but would require careful consideration of strategic direction. Both companies are keenly focused on integrating AI into their signature products; for example, Apple aims to enhance the iPhone and other services through the inclusion of AI-powered functionalities, while Meta is looking to advance its offerings across platforms like Instagram and WhatsApp.
At Apple’s recent developers’ conference in June, they showcased exciting updates to existing AI tools, including enhanced language translation and custom emoji creation. However, the company acknowledged the need for improvement, particularly exemplified by the lack of a release date for its revamped Siri. Meanwhile, Google’s lucrative deal to be the default search engine on Apple’s Safari browser remains under scrutiny amid legal investigations, potentially compelling Apple to explore alternative arrangements.
In a landscape where bold moves could decisively influence market dynamics, both Meta and Apple are actively competing to capture AI talent. Meta’s initiatives include generous recruitment packages, potentially exceeding $100 million, a reflection of the company’s recognition of AI’s importance for its overarching vision. As for Meta’s AI tools, while notable successes have occurred—such as in the case of its Llama models—growth has not been devoid of setbacks, confronting privacy concerns amid attempts to maintain its competitive edge.
Both Apple and Meta recognize the transformative power AI holds. Predictions abound that this technology could induce changes as monumental as those ushered in by the internet and smartphones. The urgency for these tech giants to innovate within the AI realm reflects a need not just for adaptation but for continual relevance in an ever-evolving industry landscape. Whether they can rise to the challenge and effectively harness AI’s potential remains to be seen, but it’s clear that their efforts carry significant implications for the future
