Apple Reportedly Shopping for AI Companies After Falling Behind in the Race

The Information reports that Apple has held talks about acquiring both Mistral AI and Perplexity. This is huge news because Apple historically hates big acquisitions - their last major purchase was Beats for $3 billion back in 2014.

The fact that they're even considering multi-billion dollar AI acquisitions shows how badly they've fucked up their AI strategy. While Google and Microsoft were spending tens of billions on AI infrastructure, Apple was sitting around thinking Siri was good enough.

As a developer, Apple's AI tools are garbage compared to Google's or Microsoft's. Their new AI writing tools give you suggestions like "make this more professional" while ChatGPT actually rewrites your whole document. Apple Intelligence feels like it was built by a team that never used competing products.

Eddy Cue, who runs Apple's services division, is reportedly pushing hard for these acquisitions. Meanwhile, software chief Craig Federighi wants to build AI capabilities in-house. This internal conflict explains why Apple Intelligence feels like it was thrown together at the last minute.

Why These Companies Make Sense for Apple

Mistral AI is a French startup building smaller, more efficient language models that actually work well on local hardware. That fits Apple's obsession with on-device processing and privacy. Plus they're European, which helps with Apple's "we're not like those American tech companies" marketing in Europe.

Perplexity builds AI-powered search that combines language models with real-time web indexing. If the DOJ kills Apple's $20 billion deal with Google for search, they'll need an alternative fast. Buying Perplexity for a few billion beats paying Google forever.

The Problem: Apple Never Does Big Deals

Tim Cook said in July that Apple is "prepared to invest more" to catch up in AI, including through acquisitions. But Apple's corporate culture is fundamentally opposed to buying innovation instead of building it.

They've acquired seven small AI startups this year, but nothing approaching the scale needed to compete with OpenAI or Google. Meanwhile, their competitors are spending insane amounts on AI infrastructure while Apple counts pennies.

Apple's reluctance to make big acquisitions has cost them before. They could have bought Netflix when it was worth $1 billion. They passed on Tesla multiple times. They let Google acquire DeepMind while Apple was focused on making the iPhone thinner.

Now they're facing the same choice with AI, except the stakes are higher. Every month they wait, these companies get more expensive or get acquired by competitors. Perplexity is already reportedly in talks to buy Google Chrome for $34.5 billion.

What This Means for Apple Intelligence

Apple Intelligence launched to universally mediocre reviews because it was built with last-generation AI models and minimal training data. Siri still can't understand basic requests half the time, and Apple's on-device AI barely works on their newest hardware.

Acquiring Mistral would give them state-of-the-art language models that actually run efficiently on Apple Silicon. Buying Perplexity would provide the search capabilities they need if the Google deal falls apart. Both acquisitions would cost maybe $10-15 billion total.

For comparison, Apple spent $100 billion on stock buybacks last year. They could afford to buy both companies with pocket change, but their corporate culture makes them treat every acquisition like it's going to bankrupt the company.

The Bigger Strategic Problem

The real issue isn't whether Apple buys Mistral or Perplexity. It's that they're shopping for solutions to problems they should have started solving three years ago. Google has been working on AI since 2016. Microsoft invested in OpenAI in 2019. Apple announced Apple Intelligence in 2024.

They're not just behind on technology - they're behind on understanding that AI is fundamental to computing going forward, not just another feature to bolt onto existing products. No acquisition is going to fix that strategic blindness overnight.