Divya van Mahajan

Can Buying Perplexity Save Apple on AI?

ai-daily-brief-podcast

Can Buying Perplexity Save Apple on AI?

Overview

This episode of the AI Daily Brief (recorded June 24, 2025) examines Apple’s reported internal discussions about acquiring AI search startup Perplexity, and whether such a deal would meaningfully address Apple’s mounting failures in artificial intelligence. The episode also covers related AI industry news: Meta/Zuckerberg’s aggressive talent and acquisition strategy, the massive funding round for Mira Murati’s stealth startup, and the legal dispute surrounding OpenAI and Johnny Ive’s “IO” venture. The host synthesizes reporting from Bloomberg’s Mark Gurman, The Verge, The Information, and several tech commentators to assess the strategic logic and limitations of an Apple–Perplexity deal.

Source video: AI Daily Brief, June 24, 2025 (URL not provided)

Prerequisites

  • Basic familiarity with the major AI lab landscape (OpenAI, Anthropic, Google DeepMind, Meta AI)
  • Understanding of how Apple generates revenue (iPhone sales, services including default search agreements)
  • Awareness of the ongoing Google antitrust proceedings in the United States
  • General knowledge of venture capital and M&A terminology (valuation, acqui-hire, equity stakes)
  • Familiarity with Perplexity AI as an AI-powered search/answer engine product

Main Points

Headlines: Zuckerberg’s Aggressive Acquisition Campaign

  • Meta is in rumored talks to partially acquire the venture fund run by Nat Friedman (former GitHub CEO) and Daniel Gross (former head of ML at Apple, co-founder of Safe Superintelligence) for over $1 billion.
  • The fund holds stakes in Perplexity, Eleven Labs, Character, and Safe Superintelligence — described as a “murderer’s row” of AI investments.
  • If the deal proceeds, both partners would join Meta under Alexander Wang in Meta’s new superintelligence division; Friedman reportedly already plays an advisory role at Meta and helped recruit Wang.
  • Zuckerberg also reportedly made offers to buy Perplexity and Mira Murati’s Thinking Machines, and attempted to acquire Safe Superintelligence (rebuffed by Ilya Sutskever).
  • Analyst Omar Kanji characterized the Friedman/Gross fund acquisition as a single deal combining talent acquisition, strategic investment, business development, and competitive intelligence simultaneously.

Headlines: Mira Murati’s Thinking Machines Closes $2B Round

  • Former OpenAI CTO Mira Murati’s six-month-old startup closed $2 billion at a $10 billion valuation — one of the largest early-stage funding rounds in venture history.
  • The company is pre-product and disclosed no product details, financial plans, or voting rights to investors; several funds passed for this reason.
  • The core asset is talent: 30+ leading researchers from major AI labs, which at Zuckerberg’s reported $100M/head rate represents at least $3 billion in implied value.
  • Andreessen Horowitz led the round; Murati retains majority voting rights and complete decision-making control.

Headlines: OpenAI / Johnny Ive “IO” Trademark Dispute

  • Marketing materials for OpenAI’s hardware venture with designer Johnny Ive were scrubbed from OpenAI’s website following a court-ordered restraining order related to a trademark complaint over the name “IO.”
  • Google X spin-out IYO (makes smart earbuds, founded 2018) alleges OpenAI and Altman heard their pitch, had Ive try the product, and then purchased Ive’s company for $6.5 billion using the same name.
  • Bloomberg’s Mark Gurman confirmed the Johnny Ive deal itself is still on track and has not dissolved.
  • The situation echoes Apple’s historical dispute with Cisco over the “iPhone” and “iOS” trademarks at the iPhone’s 2007 launch.

Background: Apple’s AI Struggles

  • Apple has been notably absent from the AI race since ChatGPT launched; Microsoft invested tens of billions in OpenAI, Google and Amazon invested in Anthropic, while Apple largely waited.
  • At WWDC 2024, Apple announced Apple Intelligence — framed as “AI for normies” with simple, daily-life integrations — but most promised features were not delivered, and Siri received no meaningful upgrade.
  • Apple Intelligence was central to the iPhone upgrade narrative; failure to deliver impacts iPhone sales, which are Apple’s primary revenue source.
  • A second WWDC came and went in 2025 with virtually no major AI announcements; the only notable AI move was opening some Apple models to developers.
  • Apple’s one meaningful AI partnership announced was with Anthropic to build an AI-assisted Xcode (“vibe coding”) platform using Claude Sonnet, but this falls well short of an acquisition.

The Apple–Perplexity Deal: What We Know

  • During the Google antitrust trial, Apple SVP Eddie Q publicly disclosed that Apple had begun talks with Perplexity and was “impressed with the product” — a notable breach of Apple’s strict no-disclosure culture around business partnerships.
  • Bloomberg’s Mark Gurman subsequently reported that Apple’s head of M&A Adrian Perica had held internal discussions with Eddie Q and other AI decision-makers about acquiring Perplexity.
  • Apple’s AI team has been actively evaluating Perplexity’s technology, but as of reporting, Apple had not discussed acquisition directly with Perplexity.
  • Perplexity stated: “We have no knowledge of current or future M&A discussions involving Perplexity.”
  • Perplexity recently raised a round at a $14 billion valuation and is reportedly close to a large deal with Samsung — Apple’s primary phone market rival.

Strategic Case For the Deal

Gurman and commentator Alex Kantrowitz outline five reasons the deal makes sense for Apple:

  1. Proven consumer product — Perplexity is market-ready, not a research project.
  2. Fills a specific gap — strong search layer and conversational interface, critical if Google is removed as default search by antitrust action (currently worth ~$20B/year to Apple).
  3. Manageable team size — ~250 employees with deep AI talent; large enough to matter, small enough to integrate.
  4. Reasonable valuation — affordable relative to Apple’s $130B+ cash reserves.
  5. Good timing — the Google antitrust situation creates urgency.

Kantrowitz argues Cook should offer $30 billion and do it immediately, before Perplexity locks into the Samsung deal or competitors foreclose the option.

Strategic Case Against the Deal

Commentator Parker Ortolani raises substantive objections:

  • Cultural incompatibility: Apple is slow-moving, hierarchical, and risk-averse at scale; Perplexity is nimble, fast, and experimental — integration could destroy what makes Perplexity valuable.
  • Wrong type of company: Apple already has product DNA; what it lacks is foundational model technology. Perplexity is also primarily a product company that “forks” existing models rather than building foundational AI.
  • Anthropic would be better: A foundational lab would put Apple on equal footing with both Google and OpenAI; Perplexity does not.
  • Integration risk: If the acquisition does not involve actual leadership integration into Apple’s decision-making, it is unlikely to move the needle on Apple’s core AI deficiencies.

Is Perplexity Better Off Staying Independent?

The host offers a balanced synthesis:

  • For independence: Perplexity can innovate faster without Apple’s structural constraints; Apple is structurally unable to be hands-off.
  • Against independence: ChatGPT, Claude, and Gemini are encroaching on Perplexity’s core search/answer functionality; being default on 2 billion Apple devices would be a decisive competitive moat.
  • Trade-off: Innovation velocity vs. protection from being squeezed out by foundation model incumbents.
  • Host conclusion: The Apple team running AI has already demonstrated an inability to compete; unless an acquisition involves genuine leadership integration, it risks being cosmetic. Either outcome — acquisition or independence — is likely net positive for consumers.

Key Concepts

  • Acqui-hire: An acquisition motivated primarily by obtaining talent rather than products, technology, or revenue.
  • Apple Intelligence: Apple’s branded AI platform announced at WWDC 2024, promising on-device and cloud AI integrations; largely undelivered as of mid-2025.
  • Default search deal: Apple’s existing agreement with Google making Google the default search engine on iPhones and Safari, worth approximately $20 billion per year to Apple and currently under antitrust scrutiny.
  • Foundational model / foundation model lab: An AI company that trains large-scale models from scratch (e.g., Anthropic, OpenAI, Safe Superintelligence), as distinct from companies that build products on top of others’ models.
  • Forking models: Colloquial term for building products and services on top of existing third-party foundation models rather than training proprietary ones.
  • Safe Superintelligence (SSI): AI safety-focused lab co-founded by Ilya Sutskever and Daniel Gross; recently raised $2B at a $32B valuation.
  • Vibe coding: AI-assisted software development where AI writes, edits, and tests code on behalf of a human developer; Apple and Anthropic are building a version into Xcode.
  • IO / IYO trademark dispute: Legal conflict between OpenAI’s hardware venture (named “IO,” involving Johnny Ive) and an existing Google X spin-out smart earbud company named “IYO.”
  • Thinking Machines: Mira Murati’s stealth AI startup, six months old, pre-product, valued at $10B after closing a $2B round.

Summary

The episode’s central argument is that Apple faces a genuine AI crisis — having failed to deliver on Apple Intelligence promises and potentially losing its $20B/year Google search deal to antitrust action — and that acquiring Perplexity is the most realistic near-term option available, even if it is not the ideal one. Reporting from Mark Gurman confirms internal Apple discussions are real, and commentators from Kantrowitz to Ortolani largely agree the strategic logic is sound. However, the host and analysts also note meaningful limitations: Perplexity is a product company, not a foundational model lab, and Apple already struggles with product execution in AI; the acquisition could be rendered ineffective if Perplexity is not given genuine leadership integration. Meanwhile, the broader industry context — Zuckerberg attempting to buy virtually every significant AI asset, Murati raising $2B on talent alone, and the AI talent market resetting at $100M per engineer — underscores that Apple risks falling permanently behind if it does not act decisively and soon.