Apple has been internally discussing the potential acquisitions of two ambitious artificial intelligence startups—French AI company Mistral and U.S.-based Perplexity, as reported by The Information and Reuters. These discussions highlight Apple’s strategic move to accelerate AI capabilities amid stiff competition from Microsoft, Google, and others. Below is a comprehensive exploration of these talks, the companies involved, and the potential implications for Apple’s future in AI.
Company Profiles and Key Attributes
| Attribute | Mistral | Perplexity |
|---|---|---|
| Origin | France | United States |
| Focus | Open-weight large language models (LLMs), privacy-centric AI, efficient on-device AI | AI-powered search and natural language processing with integrated citations |
| Founders | Ex-DeepMind engineers | AI research and product veterans |
| Valuation | Approx. €6 billion ($6.5 billion) | Approx. $14-$18 billion |
| Funding | Over $1.2 billion raised | Last round doubled valuation to $14 billion |
| Technology Strengths | High-performance, efficient LLMs optimized for Apple Silicon, European AI sovereignty | AI orchestration layer integrating models from GPT-4, Claude, and Mistral |
| Business Model | Technology and AI core development | AI search engine and assistant with external API usage |
| Potential Challenges | Regulatory hurdles in Europe over sovereignty | Legal risks due to ongoing copyright lawsuits over web scraping; dependency on third-party models |
| Alignment with Apple | High—privacy and on-device focus | Moderate—strong technology but rental of AI models with legal risks |
| Strategic Fit for Apple | Foundation model ownership, sovereignty potential | Interface layer with vendor dependencies, litigation risk |
Reasons Behind Apple’s Strategic Interest
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Closing the AI Gap: Apple has lagged behind AI rivals like Microsoft and Google who have more openly embraced AI via partnerships and acquisitions (e.g., Microsoft with OpenAI). Apple’s internal AI projects have faced delays, especially improvements to Siri and generative AI features, highlighting the urgent need to upgrade AI expertise and assets.
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Mistral’s Appeal:
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Innovative open-weight LLMs align with Apple’s privacy-first approach.
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Models optimized for Apple Silicon enable efficient on-device AI without compromising user privacy.
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Mistral’s European base offers regulatory and ecosystem benefits in the face of increasing EU AI regulations.
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Perplexity’s Offerings:
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Provides an AI orchestration platform integrating multiple advanced models.
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Could improve search and intelligent assistant capabilities in Apple products.
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Comes with immediate talent infusion but with significant risks tied to legal liability and model dependency.
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Risks and Considerations
| Aspect | Mistral Risks | Perplexity Risks |
|---|---|---|
| Regulatory | European sovereignty concerns may block approval | Ongoing litigation from media companies over data usage |
| Technological Control | Full ownership of tech; high control over models | Dependence on external AI models; no intrinsic AI ownership |
| Legal | Minimal legal baggage beyond regulatory scrutiny | Litigation risk inherited on acquisition |
| Business Model | Pure AI tech, potential centerpiece for Apple | More of an interface or wrapper over other AI |
| Cost | Estimated to be significantly less costly | Potentially $25-30 billion acquisition cost |
Industry Perspectives
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Analysts generally view Mistral as a foundational AI acquisition, giving Apple direct control over cutting-edge, privacy-focused AI technology, critical for unlocking new on-device capabilities.
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Perplexity acquisition raises caution because it is effectively an orchestration layer that rents technology, not owns it, while also exposing Apple to legal risks over intellectual property and data use.
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Apple’s reputation as a privacy-first company also underscores why Mistral, with its privacy-aligned AI, may be a better strategic fit compared to Perplexity.
Summary of Possible Outcomes for Apple
| Acquisition Target | Potential Benefits | Potential Drawbacks |
|---|---|---|
| Mistral | Privacy-compliant AI, European regulatory alignment, foundation for proprietary AI models | Regulatory hurdles, less mature outside Europe |
| Perplexity | Immediate AI talent acquisition, potential search/assistant improvements | Legal liabilities, lack of foundational model control |
Conclusion
Apple’s internal discussions about acquiring Mistral and Perplexity mark a pivotal moment in its AI strategy. Mistral offers Apple access to a sovereign AI stack optimized for its hardware and values, likely accelerating its AI roadmap with less external dependency. In contrast, Perplexity brings a different kind of AI expertise in orchestration and search but carries substantial legal and operational risks.
Balancing cost, control, legal risk, and alignment with Apple’s brand and privacy philosophy will be vital as the company moves forward. The choice between Mistral and Perplexity may well signal whether Apple pursues a powerful, sovereign AI future or opts for a shortcut with inherent baggage.