Tim Cook ought to call Perplexity CEO Aravind Srinivas and offer him $30 billion for his AI search engine. And he should do it right away.
Apple buying Perplexity is such an obviously good deal for both companies that I feel silly even writing it down. Apple would get a bonafide AI service it could plug right into Safari and Siri that would revamp its disappointing AI offering. Perplexity would get access to the 2 billion+ Apple devices in circulation and become an AI force on par with ChatGPT.
“Not likely!” Perplexity chief business officer Dmitry Shevelenko told me of a potential tie-up with Apple. “But Meta-Scale is so unlikely that I feel we aren’t living in a world of likelies.”
Apple and Perplexity have had no M&A discussions to date, Shevelenko added, not even a wink.
But that should change. As an AI search engine, Perplexity could slot in neatly across Apple’s product portfolio. It could integrate into Siri with a seamlessness that only comes via ownership. Apple values control of its product experience, and having its designers work alongside Perplexity’s engineers could help it shape exactly how its AI answers show up in the assistant. Perplexity also has an AI voice mode that could surprise and delight users, and perhaps supplant Siri one day. And many Apple customers who haven’t used AI yet could experience its power for the first time through Perplexity’s search, image generator, and Deep Research.
There’s urgency to get a deal done right away. Apple’s search partner, Google, is at risk of losing its ability to pay Apple for the default search position on Safari, a deal worth billions of dollars per year. If Apple acts now, it could start integrating Perplexity into its products and figure out how to make money from the service before it’s too late. Waiting and scrambling only if the ruling goes through could lead to years of setbacks. And Perplexity’s price will likely go up if a court ruling prevents Google from paying Apple.
Perplexity is also wrapping up a $500 fundraising round at a very manageable $14 billion valuation. If Apple doubled that amount in a purchase offer, Perplexity would have to take it. And Apple has the money. The company did a $110 billion share buyback last year and announced a $100 billion buyback this year.
Apple’s slow AI start is a strategic crisis. There will never be a better time to use its cash. Spending $30 billion on a legitimate AI player is vastly better than standing still. The market would likely celebrate it, even if it means a smaller buyback. Growth stocks get growth multiples.
Adding to the import of getting this done now, Perplexity has a deepening partnership with Samsung that could be hard to dissolve with time. Currently, the companies are offering Perplexity Pro for free to all Samsung users. But they’re in talks for a deeper partnership that would include preloading Perplexity onto Samsung devices and integrating it into Samsung’s browser. Apple swooping in and taking Perplexity off the table would be ruthless, but also a sign it knows the stakes of this AI moment and isn’t messing around.
The acquisition might get the attention of antitrust regulators, but consider this: Apple has practically no share in the search market since it’s effectively outsourced it Google. And Perplexity is still tiny compared to the incumbents. It would be exceptionally difficult to argue the deal helps illegally maintain a search monopoly. It would likely sail through approvals.
Even at its small size, Perplexity is showing good momentum. Srinivas recently said the company is seeing 20% month-over-month growth in search queries and handled 780 million queries in May. That’s minuscule compared to Google’s 5 trillion searches per year, but there’s plenty of room to grow. And Perplexity’s AI search product is largely beloved by its users.
This would be the biggest acquisition in Apple’s history (by far), potentially 10X its $3 billion Beats purchase. But the fit, urgency, and potential make the move necessary at a time when Apple needs to do something bold in AI, especially as its in-house team struggles to ship. Tim, if you’re reading this, close your mail app and get on the phone with Perplexity right away.
This article is from Big Technology, a newsletter by Alex Kantrowitz.
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