In the fast-moving world of artificial intelligence, one relatively young startup is catching the attention of Silicon Valley’s biggest names. Perplexity, an AI-powered search engine founded in August 2022, has reportedly drawn acquisition interest from both Meta and Apple in recent months, according to sources familiar with the discussions.
Meta held preliminary acquisition talks with the company in late April or early May, though no deal was reached. Apple, meanwhile, internally floated the idea of acquiring Perplexity as it continues to reshape its AI ambitions. While the talks are not confirmed to be ongoing, the interest highlights the growing strategic value of AI search as the next frontier of user interaction.
“We have no knowledge of any current or future M&A discussions involving Perplexity,” Jesse Dwyer, the company’s head of communications, said in an email to CNN when asked about the reports. Meta declined to comment, while Apple did not respond.
What Perplexity Brings to the AI Race
Perplexity distinguishes itself from traditional search engines by generating concise, AI-driven answers to user queries, often including summaries and links to source material. It currently operates with two primary search modes: a quick search for general enquiries and a more research-intensive pro search.
Since its launch in December 2022, Perplexity has expanded beyond basic query responses. Its platform now supports file analysis, itinerary generation, curated topic pages, image creation, and even project management, all through AI-driven interfaces. However, many of these advanced features are gated behind a $20 monthly subscription.
The company is also developing a web browser called Comet, further signalling its ambitions to compete with larger incumbents in both search and browsing experiences.
Despite being considered an upstart, Perplexity faces an uphill battle against dominant players. In the third quarter of 2024, ChatGPT, developed by OpenAI, accounted for 45% of AI chatbot app downloads, with Perplexity falling into the undifferentiated “others” category, according to app analytics firm Sensor Tower.
Legal Tensions Over Content Use
With its AI-generated summaries, Perplexity has found itself in the middle of one of AI’s thorniest debates: content usage. The BBC recently threatened legal action over allegations that Perplexity copied its content without permission. Similar lawsuits were filed last year by Dow Jones, the parent company of The Wall Street Journal, and the New York Post, claiming the startup had syphoned traffic away from their websites.
These disputes reflect broader concerns across the media industry about how AI companies train and generate content and who benefits from it.
Why Meta and Apple Are Interested
The mounting interest in Perplexity from Meta and Apple is hardly surprising given the mounting pressure both companies face in the AI race.
Apple, despite unveiling AI enhancements at its June developers conference like language translation tools and customisable emojis, has yet to fully impress the market. Its much-anticipated Siri overhaul remains unreleased. Meanwhile, the company continues to rely heavily on Google, which pays billions annually to remain the default search engine on Apple’s Safari browser, a deal now under legal scrutiny by the U.S. Justice Department.
Bloomberg previously reported that Apple’s Senior VP Eddy Cue suggested in court that Apple may consider developing its own AI-powered search engine. A potential acquisition of Perplexity could accelerate that pivot.
“Apple needs to be relevant here,” said Ben Bajarin, CEO of Creative Strategies, in a March interview with CNN. “And the fact that they don’t have a lot to show for their efforts is, I think, what gives most people the concern.”
Meta, for its part, is aggressively courting AI talent. The company has reportedly offered signing bonuses as high as $100 million in a bid to poach top minds from competitors like OpenAI. It also recently invested in Scale AI, a data-labelling company now valued at over $29 billion, hiring its founder, Alexandr Wang, in the process.
While Meta has made progress with its open-source Llama models and AI-enabled Ray-Ban smart glasses, it has also hit roadblocks. Its latest Llama model was delayed, and privacy concerns surfaced around its standalone AI app, which unintentionally made some private queries public.
A Battleground for the Next Internet
The AI race has become a defining battle for the next evolution of the internet, one that both Apple and Meta played leading roles in during the mobile and social media eras. With AI poised to reshape how people search, communicate, and work, the companies can’t afford to fall behind.
Whether or not a Perplexity deal materialises, the interest alone signals that the war for AI dominance is far from over and even the biggest players are looking for a leg up.
