Apple and Meta have recently expressed interest in acquiring the startup.

Major tech companies are rushing to acquire Perplexity

 

Major tech companies are rushing to acquire Perplexity... Why?

Recent reports have revealed that Apple and Meta have recently expressed interest in acquiring the AI ​​startup Perplexity, at a crucial time in the rapidly evolving AI landscape.

What are Apple and Meta's goals?

Apple and Meta are currently facing challenges in AI. Apple has been affected by the delay in AI features promised last year, most notably an improved version of its digital assistant, Siri. In addition, Apple is facing a class-action lawsuit filed last week by shareholders accusing it of fraud by underestimating the time it takes to integrate advanced AI technologies into Siri, which has hurt iPhone sales and the company's stock price.

Meta, on the other hand, lacks the talent needed to become a leader in AI and its technologies compared to its competitors, and is seeking to achieve what is known as "superintelligence" through a newly formed team. The company, especially its CEO Mark Zuckerberg, has been actively seeking AI talent from other companies, including OpenAI, for some time, offering huge financial offers, but these have not been successful.

Meta recently concluded a deal to invest $14.3 billion in Scale AI, a data labeling startup. The tech giant acquired a 49% stake in the startup, and Scale AI's CEO joined Meta's superintelligence team. Prior to this deal, Meta wanted to acquire Perplexity. The two companies held discussions about the matter, but they did not reach an agreement and decided not to pursue the deal, according to Bloomberg.

In Apple's case, its executives reportedly held internal discussions about a possible acquisition offer for Perplexity. Apple was planning to integrate AI-powered search capabilities, similar to those offered by Perplexity, into its Safari browser.

Why Perplexity?

Founded in 2022, Perplexity has emerged as one of the most prominent startups using generative AI to reshape one of the internet's core services: search. The company is backed by Amazon founder Jeff Bezos, AI chip pioneer Nvidia, and SoftBank Group.

Perplexity competes with Alphabet Inc.'s Google by offering an AI tool that summarizes search results, lists sources for answers, and helps users refine their queries to get the best results. The startup is also developing an AI-powered web browser. Unlike traditional search engines, Perplexity allows users to interact naturally by asking questions and receiving answers from trusted sources. This approach has challenged prevailing search standards, making Perplexity a growing threat to Google's dominance of the search market.

Users now appreciate Perplexity's ability to provide flexible access to multiple language models, in addition to its own large language model, Sonar. This model is multimodal, meaning it can handle not only text inputs but also voice and image-based queries. With this innovation, Perplexity is expected to reach approximately 15 million users by mid-2024. Apple and Meta's interest in Perplexity reflects that this young, fast-growing company has the answers to what the tech giants are currently looking for in AI.

This comes at a time when Perplexity represents an alternative to Google search results, which users have lost confidence in due to the declining quality of content, especially with the integration of inaccurate AI-powered features such as AI Overviews. Moreover, Perplexity's transparent linking system and sleek design make it more suitable for iOS, which may explain Apple's growing interest in it, according to a report by The Technology Express, reviewed by Al Arabiya Business.

Any deal with Perplexity would offer a ready-to-use product with a substantial user base and a small, easy-to-integrate team, with approximately 250 employees. Furthermore, Perplexity's valuation of approximately $14 billion would not represent a burden for major tech companies. Meta, for example, has invested more than this amount in Scale AI for a 49% stake.