Apple Plans Siri AI Upgrade To Outpace Perplexity As Wall Street Pushes $30 Billion Buyout: Report
News Summary
Apple Inc. is reportedly developing its own AI-powered web search tool, internally dubbed “World Knowledge Answers,” for integration into Siri by 2026. This system will function as an “answer engine” providing summarized responses, similar to ChatGPT and Google AI overviews. Apple has also reached a formal agreement with Google to evaluate Google-developed AI models to power Siri. Concurrently, Apple executives have reportedly held internal discussions about potentially acquiring Perplexity AI, a rapidly growing AI startup with $150 million in annual recurring revenue and backing from Nvidia, SoftBank, and Jeff Bezos. Wall Street analysts, including Wedbush Securities' Dan Ives, advocate for a Perplexity acquisition, calling it a “no-brainer” and estimating a $30 billion deal. Analysts highlight Apple's perceived lag in the AI revolution, noting its stock has underperformed among the “Magnificent Seven” companies this year, being the only one with negative returns.
Background
As of 2025, the rapid ascent of generative AI technologies, exemplified by ChatGPT and Google AI overviews, is redefining digital search and personal assistant interactions, placing significant innovation pressure on traditional tech giants. Apple Inc., a member of the "Magnificent Seven," has seen its stock underperform this year, being the sole company in the group with negative returns. This reflects investor concerns about its AI progress, especially as competitors aggressively pursue AI strategies. Emerging AI search engine companies like Perplexity AI have garnered substantial investment and market attention due to their innovative summarized answer capabilities and rapid user growth, further highlighting the challenges faced by traditional search engines and digital assistants.
In-Depth AI Insights
What are the deeper motivations behind Apple simultaneously pursuing internal AI development and external acquisition discussions? - This indicates a sense of urgency and a dual-track strategy in Apple's AI approach. Developing "World Knowledge Answers" internally is a long-term capability build but potentially slower. - Considering the acquisition of Perplexity AI represents a fast-track market entry strategy, aiming to quickly acquire advanced technology, talent, and user base to compensate for a perceived lag in generative AI. - This two-pronged approach reflects Apple's recognition of intense competitive pressure in the AI space and its effort to accelerate its catch-up while maintaining control over core technologies. Beyond enhancing Siri's functionality, what broader market competition and strategic challenges is Apple addressing with these AI moves? - Apple's actions aim to counter the disruption caused by "answer engine" models (like ChatGPT and Google AI overviews) to traditional information retrieval, preventing its core ecosystem from being marginalized in the AI era. - By integrating more powerful AI search, Apple intends to boost the attractiveness of its hardware products, especially as innovation growth in core products like the iPhone slows, making AI a new selling point. - This move also responds to pressure from Wall Street and investors. With its stock underperforming among the "Magnificent Seven," Apple needs to demonstrate leadership and innovation in critical emerging technologies to boost market confidence. If Apple successfully acquires Perplexity AI, what potential impacts could it have on the future AI search market and its own ecosystem? - An acquisition would significantly accelerate Apple's deployment in the AI search domain, quickly providing it with a mature, rapidly growing "answer engine" to directly challenge existing giants like Google. - This could lead to a qualitative leap in Siri's capabilities, transforming it from a simple voice assistant into a more intelligent, conversational knowledge retrieval and task execution platform, thereby enhancing user stickiness within the Apple ecosystem. - In the long term, Apple could leverage Perplexity's technology to further integrate its software and hardware services, creating a highly optimized AI experience. This could not only change how users interact with digital devices but also reshape the competitive landscape for AI services on mobile platforms.