Senior Vice President Eddy Cue is a key proponent of the acquisition strategy. He believes buying established AI companies would quickly boost Apple’s capabilities. Cue previously supported acquiring Netflix and Tesla, but CEO Tim Cook rejected those ideas.
Apple’s Internal AI Acquisition Strategy Debate
According to The Information, Apple’s leadership team is divided on acquisition approaches. Services chief Eddy Cue strongly advocates for purchasing AI startups. He views acquisitions as the fastest path to competing in artificial intelligence.
Software engineering chief Craig Federighi prefers developing technology in-house. He believes Apple can build superior AI without massive acquisitions. This internal debate has shaped the company’s cautious approach to major deals.
Apple has historically avoided multibillion-dollar acquisitions. Their largest purchase was Beats Electronics for $3 billion. The Intel modem business acquisition cost approximately $1 billion.
The potential Mistral or Perplexity deals would likely exceed these amounts significantly. Apple’s hesitation stems from this traditional conservatism regarding major acquisitions. The company typically focuses on smaller, strategic technology purchases.
Why Apple Might Need AI Search Technology
Apple’s interest in AI companies connects to its search engine dilemma. The company maintains a lucrative deal with Google as Safari’s default search. This arrangement generates an estimated $20 billion annually for Apple.
Regulatory pressure threatens this longstanding partnership. U.S. antitrust cases could potentially dismantle the Google-Apple search agreement. This would create an urgent need for Apple to develop alternative search technology.
Perplexity’s AI-powered search engine presents a potential solution. Their technology provides conversational answers with cited sources. This contrasts with traditional search engines that simply list links.
Acquiring Perplexity could help Apple replace Google’s search functionality. The technology would integrate across Apple’s ecosystem of devices. This would maintain the search experience while keeping revenue within Apple.
Apple continues evaluating its artificial intelligence strategy amid growing competition. The potential acquisitions of Mistral AI and Perplexity represent significant potential shifts. These moves could fundamentally reshape Apple’s position in the AI landscape.
Frequently Asked Questions
Which AI companies is Apple considering acquiring?
Apple has discussed acquiring both Mistral AI and Perplexity. These are artificial intelligence startups specializing in different AI technologies.
Why would Apple want to acquire an AI company?
Apple needs to accelerate its artificial intelligence capabilities. Acquiring established companies provides immediate technology and expertise.
What is Mistral AI known for?
Mistral AI develops open-weight large language models. The Paris-based company creates efficient AI systems for reasoning and coding tasks.
How does Perplexity’s technology work?
Perplexity combines large language models with real-time web indexing. It provides conversational answers while showing information sources.
Who at Apple supports these acquisitions?
Services chief Eddy Cue advocates for acquiring AI companies. Other executives prefer developing technology internally.
How might regulatory issues affect Apple’s plans?
Antitrust cases threaten Apple’s search deal with Google. This makes AI search technology more valuable to Apple’s future.
Reference Sources
This article was developed from reporting by The Information. Additional context was provided by Bloomberg and Reuters coverage of Apple’s business strategies.
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