Apple’s search for an AI acquisition is intensifying as discussions about a potential acquisition of Perplexity have cooled. The company’s latest earnings call revealed a pressing need for fresh talent, especially as engineers from its Foundation Models team continue to leave. With Perplexity facing challenges, including allegations of circumventing content restrictions, Apple is evaluating other options to bolster its AI capabilities.
In 2023, Apple reportedly made over 30 acquisitions in the AI sector, exceeding the number of such acquisitions by companies like Google, Meta, and Microsoft. Despite this aggressive approach, Apple has struggled to fulfill its AI ambitions. For instance, while competitors like OpenAI have rapidly enhanced their products, Apple’s Writing Tools, introduced a year ago, have seen minimal progress. Additionally, the anticipated revamp of Siri has encountered several setbacks, highlighting the company’s urgency to innovate.
As Apple contemplates its next steps, the need for product-ready technology is evident. The company requires a strategic acquisition that not only brings in talent but also aligns with its existing framework and culture. The list of potential candidates is limited, particularly with major players like OpenAI and Anthropic clearly off the table.
Potential Acquisition Candidates for Apple
While Perplexity could provide some advantages, particularly for enhancing Siri, its focus on e-commerce and finance diverges from Apple’s core interests. At a valuation of $18 billion, there seems to be potential for Apple to find a better fit elsewhere.
One emerging contender is Mistral, a French startup valued at $10 billion. Mistral boasts its own suite of foundation models and a variety of products including developer tools, OCR capabilities, and APIs. Its commitment to privacy and responsible AI development aligns well with Apple’s values, making it an attractive option for acquisition.
Another potential candidate is Aleph Alpha, based in Germany, which has raised nearly $1 billion in funding. Although its focus is primarily on enterprise and public-sector AI, Apple has previously shifted gears successfully, suggesting that a pivot could be possible. However, maintaining team motivation might be a challenge if the core mission diverges from consumer technology.
The list of viable acquisition targets narrows significantly beyond these companies. Other possibilities include Ai2, known for its open research, and Kimi, a Beijing-based lab recognized for its K2 model. There’s also Cohere, which focuses on developer-facing products, although its alignment with Apple’s consumer goals is questionable.
Adding to this landscape are companies like Mira Murati’s Thinking Machines Lab, currently valued at $12 billion, and Ilya Sutskever’s Safe Superintelligence, which has reached valuations exceeding $30 billion. Both companies are generating buzz based on future promises rather than tangible products, which may not meet Apple’s immediate needs.
Conclusion: A Critical Window for Apple
As the AI acquisition landscape becomes increasingly competitive, Apple’s options are dwindling. The potential rise in valuations for AI labs further complicates its search for suitable candidates. Among the current prospects, Mistral stands out as a prime candidate that could help Apple correct its course in the AI domain. The company faces a critical period in which strategic decisions will shape its future in the rapidly evolving tech landscape.
