From iPhone to Digital Mind: Apple's Bold Move on Perplexity AI

Diving into the heart of technological innovation, the recent discussions between Apple and Perplexity AI have sparked a wave of speculation and analysis in the industry. This potential union between the Cupertino giant and the emerging AI search startup could redefine the future of online search and user interaction with their devices. We talk about it with Ansa journalist Antonino Caffo.

⁠ What are the main motivations that drive Apple to evaluate the acquisition of Perplexity AI, and what strategic objectives would it like to achieve in the field of generative artificial intelligence?

Apple’s primary motivations for considering a partnership with or acquisition of Perplexity AI are rooted in the need to accelerate its race into the generative AI arena. For years, Apple has taken a more cautious, privacy-focused approach, integrating AI incrementally into its products through Siri and on-device machine learning capabilities. However, the explosion of large language models (LLMs) like OpenAI’s GPT and Google’s Gemini has exposed a strategic lag. Apple is now looking to fill that gap and integrate more sophisticated, conversational AI capabilities into the core of its ecosystem. The primary strategic goal is to transform Siri from a functional voice assistant into an intelligent “answer engine,” capable of understanding complex context and providing direct, accurate, and contextualized answers based on real-time information. Acquiring Perplexity AI would allow Apple to bypass years of internal development by integrating technology that is already mature and focused on this type of conversational research. This would align perfectly with Apple's vision of increasingly personal and proactive computing, where the device anticipates the user's needs and provides information without the need for traditional link-based search.

How could Perplexity AI help Apple catch up with competitors like OpenAI, Meta, and Microsoft in AI and augmented search?

Perplexity AI represents a strategic shortcut for Apple to catch up with competitors like OpenAI, Google, and Microsoft. While Google is deeply integrating its generative AI into its search engine, and Microsoft has made a massive investment in OpenAI, integrating it into Bing and its Windows operating system, Apple has been left behind in the race to AI-powered search. Perplexity AI’s model, which functions as an “answer engine” by providing concise summaries and citing sources, is a stark departure from the traditional list-based search engine approach. The technology could be integrated directly into iOS, iPadOS, and macOS, powering Siri and Spotlight search. Instead of redirecting users to a Google results page, the operating system itself could provide the answer, dramatically improving the user experience and keeping users within the Apple ecosystem. This would not only put Apple ahead of the competition, but also potentially enable the superior, more seamless, and integrated user experience that has long been a hallmark of the company.

Perplexity AI is being valued at around $14 billion: how do you justify this value and what are the technological strengths that support it?

This assessment may seem surprising but it is justified by several key factors. The first is the intrinsic value of the technology. Perplexity has developed proprietary linguistic models and a search infrastructure capable of analyzing and synthesizing information from the web in real time with remarkable accuracy and providing sources, a crucial element for credibility. This hybrid approach, which combines traditional web search with the power of linguistic models, is considered by many to be the future of online search.

Additionally, the value is underpinned by the strategic potential it represents for an acquirer like Apple. The cost of the acquisition, while high, must be weighed against the cost and time required to develop similar technology internally, as well as the risk of failing to achieve the same level of sophistication. Finally, the valuation reflects the current “gold rush” in the field of generative AI, where talent and cutting-edge technology are rewarded with astronomical valuations due to their potential to disrupt entire industries.

A partnership or acquisition by Apple could be a response to a possible halt to the billion-dollar deal with Google. How do you see the future of search on Apple devices if the default search engine changes?

For years, Google has paid Apple big bucks to be the default search engine on Safari. This arrangement has come under increasing scrutiny from antitrust authorities, who see it as a potential anti-competitive practice. If this arrangement were to end, Apple would be faced with a choice: develop its own search engine or find a new partner. The integration of Perplexity AI would offer a third, and perhaps more elegant, way out. Instead of replacing Google with another traditional search engine, Apple could revolutionize the search experience itself, making the concept of a “default search engine” obsolete. Search would become a native function of the operating system, an intelligent dialogue with the device. This would not only solve the problem of Google dependency, but would also represent a qualitative leap in the user interface, in line with Apple's philosophy of innovation.

What were Apple’s main requests or expectations during the first meetings with Perplexity, and what synergies could arise between the two groups?

In early meetings, Apple’s demands reportedly focused on deeply integrating Perplexity’s technology into its hardware and software ecosystem, with a particular emphasis on privacy and on-device data processing. Apple is known for its rigorous approach to protecting user data, and any partnership would require Perplexity’s technology to align with those standards, possibly by doing much of the processing directly on the iPhone or Mac, rather than in the cloud. The synergies between the two groups are clear. Apple would bring a user base of more than two billion active devices and unmatched distribution capabilities. Perplexity, on the other hand, would provide the advanced AI technology and agility of a single-purpose startup. The combination could lead to a truly personal and contextual AI assistant that can handle email, book appointments, plan trips, and answer complex questions, all with a level of integration and fluidity that competitors would struggle to replicate.

How is Perplexity preparing for potential collaboration scenarios with large companies like Apple, especially in a context of increasing antitrust scrutiny of tech giants?

With antitrust authorities increasingly focusing on tech giants, Perplexity AI knows that a direct acquisition by a giant like Apple would almost certainly be subject to scrutiny from regulators in Europe and the United States. For this reason, a close collaboration or technology licensing agreement may be a more viable and less legally risky path initially. Perplexity is also working to diversify its partnerships and establish itself as an independent, neutral player in AI research. By partnering with other tech and telecom companies, it can demonstrate that it is not dependent on a single partner and that its technology can benefit the entire digital ecosystem, rather than being an exclusive tool for one tech giant. This strategic positioning not only makes it a more attractive partner, but also provides it with greater negotiating leverage and a stronger defense against potential antitrust concerns.