What Is Perplexity, the AI Startup Drawing Interest from Meta and Apple

A relatively young artificial intelligence startup is drawing significant interest from major tech players, as both Meta and Apple have explored possible acquisition talks with Perplexity, an AI-powered search engine company. These discussions, held in late April and early May, reportedly did not result in a finalized agreement. While Meta engaged directly with the company, Apple is said to have held preliminary internal discussions, indicating a broader strategy under consideration.

This interest reflects the intensifying competition among large technology firms to secure a leading position in artificial intelligence. Apple and Meta, often perceived as trailing behind competitors such as Google and OpenAI, are seeking to enhance their capabilities through strategic investments or acquisitions. The push to integrate AI into core products and services signals a shift toward prioritizing generative AI technologies that may redefine digital interaction.

What Perplexity Offers in the Evolving AI Landscape

Founded in August 2022, Perplexity launched its AI-driven search engine later that year in December. The platform uses advanced models to sift through web content and provide summarized answers, typically accompanied by source links. It differentiates itself with two search modes: quick search for basic queries and pro search for more detailed responses. The company also limits certain features behind a subscription paywall, including unlimited file uploads and access to additional models, priced at $20 per month.

Beyond search, the tool supports a range of functions comparable to leading AI platforms. Users can pose questions related to documents, request project assistance such as itinerary planning, generate images, and browse curated topics. Perplexity is also developing a proprietary web browser named Comet to expand its ecosystem further.

Despite growing user adoption, Perplexity remains a smaller player in a competitive space. During the third quarter of 2024, OpenAI’s ChatGPT led the market with 45% of global AI chatbot app downloads, while Perplexity was grouped among smaller competitors in aggregated reporting data.

Perplexity has not escaped legal scrutiny in its rise. Major media outlets have accused the startup of using their content without authorization. In the past year, organizations including the BBC, Dow Jones, and the New York Post have taken or threatened legal action, alleging that Perplexity repurposed copyrighted materials and diverted web traffic without permission.

Strategic Implications for Apple and Meta

Acquiring Perplexity could help both Apple and Meta address perceived gaps in their AI offerings. For Apple, integrating a capable search engine into its existing ecosystem could serve as a contingency if its default search agreement with Google, currently under antitrust investigation in the United States, becomes untenable. Reports have indicated that Apple is considering enhancements to its Safari browser that incorporate native AI search tools, alongside updates to existing AI features like custom emojis and translation.

Apple’s digital assistant Siri, once a pioneering AI interface, is undergoing a long-promised overhaul that has yet to materialize in a public release. The acquisition of a functional AI search product could bolster Apple’s services while it refines its core voice assistant and AI strategy. Apple has also forged partnerships with OpenAI and Google to power some of the new AI functions in iOS.

Meta’s interest is aligned with its broader efforts to recruit top AI talent and expand its research capabilities. The company has reportedly offered compensation packages exceeding $100 million to lure high-level AI researchers and engineers. Its recent investment in Scale AI, a firm specializing in data labeling tools essential for AI training, is valued at over $29 billion. As part of that arrangement, Scale AI’s founder joined Meta, reinforcing the company’s commitment to long-term AI development.