Apple is reportedly contemplating something unthinkable a few years ago: shelling out significant amounts of money to buy its way into the artificial intelligence race.
The technology giant has reportedly internally weighed up acquiring two prominent AI startups, French company Mistral and US-based Perplexity, as the pressure is building to keep up with the likes of Google and Microsoft, according to a fresh report by The Information.
This potential action is an extreme deviation from Apple’s usual modus operandi. Apple has always preferred developing technologies internally rather than acquiring them through splashy transactions, especially when it comes to cutting-edge realms like AI.
But the competitive landscape has undergone a sea change, and Apple is struggling to keep pace.
Apple, Mistral, and the Future of AI
Google has been pushing Gemini AI aggressively on its platforms, and Microsoft has rolled out its Copilot assistant on its ecosystem. These actions are changing customer expectations, with customers now looking for smart assistants, more intuitive search, and AI fluidity across devices.
The drive for high-end purchases is being spearheaded, reports say, by Apple services head Eddy Cue, who has been advocating for more aggressive merger-and-acquisition strategies. While CEO Tim Cook is still typically conservative, Apple’s go-to strategy of small, targeted buys has made big deals as viable as ever.
Founded just a year ago in Paris, Mistral is already Europe’s answer to American AI giants like OpenAI. The company trades in so-called “open-weight” big language models AI systems that are faster, slimmer, and easier to load than much of the competition, but no less able to think and code.
Mistral’s recent rounds of funding have valued the company at over $6 billion, with some expecting a $10 billion valuation to be announced. For Apple, acquiring Mistral would be able to transform Siri overnight from its present limited capacity into a fully conversational assistant that knows how to recognize context and respond with actually helpful answers.
Why Mistral is so attractive is that it fits with Apple’s privacy-focused philosophy. Mistral models can run locally on devices rather than having to be continuously connected to the cloud, something that is fully in keeping with Apple’s need to keep user data secure.
Apple’s Potential Acquisition of Perplexity
Perplexity is another, but no less fascinating chance. The US startup has done something new in the field of AI search, building conversational answer engines that combine large language models with real-time data to give clear, source-referenced answers.
This focus on accuracy and transparency is consistent with Apple’s brand identity. More importantly, adding Perplexity could help Apple reduce its dependence on Google, something that currently sees Apple paying billions of dollars to feature Google as the default search engine on Macs and iPhones.
These acquisition talks are timely for Apple. Its profitable search partnership with Google is increasingly coming under regulatory fire, perhaps to the tune of billions of dollars in annual revenue. Having its own AI-driven search and assistant functions would give it the protection it needs from the competition.
Why AI is Pushing the Tech Giant to Consider Major Acquisitions
Apple definitely does have the financial wherewithal to acquire large mergers and acquisitions, with more than $200 billion in cash reserves. However, the company also has many problems beyond money.
Cultural integration is a top priority. Whytech’s European heritage and open-source ethos are potentially conflicting with Apple’s typically closed ecosystem approach. Perplexity’s high-energy startup culture may be tricky to combine with Apple’s more deliberate development processes.
There is also the regulatory aspect. US antitrust authorities are carefully monitoring Big Tech takeovers, and any large Apple takeover would certainly undergo close scrutiny.
Even though there have been no concrete offers yet, these internal discussions are a sudden change of heart for Apple. The company appears to be recognizing that some fundamental advancements in AI will require it to break its precedent of building everything internally.
Whether Apple does manage to acquire big is yet to be seen, but that such talks are happening indicates the AI revolution has finally reached Apple’s notoriously hermetically-sealed boardroom.
