Apple May Make Its Biggest Acquisition Yet to Fix AI Problem [Report]

Apple may have to spend big to fix its AI problem, and a new report from Bloomberg's Mark Gurman suggests the company has its eye on search startup Perplexity. In his latest newsletter, Gurman lays out a case for why Apple might need to make the largest acquisition in its history to get back in the game.

Apple's current models are relatively underpowered. Its on-device model has 3 billion parameters — a measure of complexity and learning ability — while its cloud version has 33 billion. That's far behind what competitors like OpenAI and Google are deploying. Buying a multibillion-dollar AI company would represent a radical shift away from Apple's conservative M&A strategy. But sticking to business as usual risks leaving the company even further behind in the most important tech race since the smartphone.

It's no secret that Apple's in-house AI work has reportedly floundered. While the company has touted its integrated approach and privacy features, it has largely "missed the AI moment." The public delay of its revamped, more capable Siri is the most visible sign of these struggles.


Gurman points to Perplexity AI as the most logical buyout target. He argues the AI-powered search engine is a good fit, with a consumer-ready product that could slide right into Safari, Spotlight, and Siri. With a team of around 250 and a valuation of about $14 billion, it's a digestible, high-upside move for Apple. The ongoing antitrust case threatening Apple's search deal with Google only makes the timing more urgent. Apple's own services chief, Eddy Cue, has already said he's impressed with Perplexity, and we've previously reported that Apple executives have been discussing the startup internally.

Perplexity isn't the only name that's been on Apple's radar. According to Gurman, Apple also met with former OpenAI CTO Mira Murati earlier this year to discuss a potential deal for her new AI startup, Thinking Machines Lab, though those talks didn't progress.

A major acquisition would be a huge shift from Apple's usual playbook. Its largest-ever purchase was the $3 billion deal for Beats in 2014, and other big moves—like buying Intel's modem business—have yielded mixed results, with Apple's first in-house modem arriving years late. This history has reportedly made the company wary of large-scale M&A.

Gurman also rules out other AI leaders like OpenAI and Anthropic as likely buyout candidates due to their sky-high valuations and deep ties to Apple's rivals. However, he notes that other smaller firms like Cohere, Sierra AI, Databricks, and Mistral could be on the table.


Please download the iClarified app or follow iClarified on Twitter, Facebook, YouTube, and RSS for more Apple AI updates.