Apple Explored Acquiring AI Powerhouses Mistral and Perplexity Amidst Generative AI Push

The tech world is abuzz with the revelation that Apple, typically a quiet giant in the M&A space for major players, internally discussed acquiring two of the most talked-about artificial intelligence startups: France's Mistral AI and the US-based AI search engine, Perplexity AI. This eye-opening report from The Information pulls back the curtain on Apple’s intense push to supercharge its generative AI capabilities and close the gap with competitors who have been making significant strides in the field.

While these exploratory discussions ultimately didn't lead to any completed deals, they underscore the urgency within Apple's Cupertino headquarters to secure a leading position in the burgeoning AI landscape.

For a company that often prefers to develop technologies in-house, considering such high-profile acquisitions speaks volumes about the strategic importance placed on advanced AI models and applications.

Mistral AI, often hailed as Europe's champion in artificial intelligence, has captivated the industry with its commitment to open-source models and its rapid ascent.

Founded by former researchers from Google and Meta AI, the Parisian startup recently commanded a staggering valuation of approximately €5.8 billion (around $6.2 billion) after a Series B funding round that injected €600 million (roughly $640 million) into its coffers. Its impressive roster of investors includes major players like General Catalyst, Lightspeed Venture Partners, Andreessen Horowitz, Nvidia, and Salesforce, highlighting its immense potential and the confidence it inspires.

Across the Atlantic, Perplexity AI has emerged as a formidable challenger in the search engine arena, positioning itself as a direct competitor to Google by leveraging cutting-edge AI.

This US-based startup, too, has garnered significant investor interest, raising $73.6 million in its Series B round, which valued it at $520 million. Its investor list reads like a who's who of tech titans, featuring Amazon founder Jeff Bezos, Nvidia, and former YouTube CEO Susan Wojcicki, among others.

Perplexity has also forged strategic partnerships with major telecommunication companies like Deutsche Telekom, SoftBank, and SK Telecom, showcasing its ambition to integrate AI-powered search far and wide.

These internal discussions at Apple highlight a pivotal moment for the iPhone maker. For years, Apple has focused on a more cautious approach to AI, often emphasizing privacy-centric, on-device capabilities.

While CEO Tim Cook has consistently maintained that Apple prefers in-house development for core technologies, he has also acknowledged the potential for strategic partnerships and acquisitions when they align with the company's vision. Apple's past AI acquisitions have typically been smaller, focused on specific technologies like visual AI (DarwinAI) or video compression (WaveOne).

The recent unveiling of "Apple Intelligence" at WWDC, integrating generative AI seamlessly across iOS, iPadOS, and macOS, demonstrates Apple's commitment to catching up.

The internal Ajax large language model is at the heart of this initiative. The consideration of companies like Mistral and Perplexity reveals that Apple was, and likely still is, exploring all avenues to accelerate its AI journey – whether through its formidable internal teams, strategic alliances, or, potentially, game-changing acquisitions.

The fact that these talks didn't culminate in acquisitions doesn't diminish their significance.

Instead, it offers a rare glimpse into the intense strategic planning occurring within Apple as it navigates the rapidly evolving and highly competitive world of generative AI. It shows Apple's willingness to look outside its walls for innovative solutions and top-tier talent, even as it continues to forge its own path forward in the AI revolution.