Apple Inc. has recalibrated its action points to catch up with competition in the AI race. It is building an ‘answer engine’ that responds to general queries by curating information from web sources.
To develop this ChatGPT-esque application, the company has established a new ‘Answers, Knowledge and Information’ team, as per a Bloomberg report, which notes that this marks a shift from the company’s previous strategy of not building a standalone chatbot application, and instead partnering with OpenAI to integrate ChatGPT into Siri.
CEO Tim Cook held a ‘rare all-hands meeting’ following the earnings call, as revealed by another Bloomberg report. He reportedly told employees that the AI revolution is “as big, or bigger than the internet, smartphones,” and was quoted as saying, “Apple must do this. Apple will do this. This is sort of ours to grab.”
Many in the industry, mostly users, have been disappointed by the progress made or the lack of it by the iPhone maker in the AI segment, with competitors like Samsung and Google taking the lead in integrating AI capabilities into smartphones. However, during the all-hands meeting, Cook justified saying that Apple has rarely been first to anything — citing examples of how a PC existed before the Mac was launched, touchscreen smartphones arrived before the iPhone, and even the MP3 player was around before the iPod.
In an attempt to offer hope to users and the company internally, he was quoted as saying that Apple built the modern versions of these products instead, and this is also how he feels about AI.
If these plans follow through, Apple will have a significant advantage with regards to distribution, as the company revealed in its Q3 2025 financial results that it has sold its three billionth iPhone.
The iPhone division achieved record results with $44.6 billion in revenue for the quarter, marking a 13% increase year-over-year. This growth occurred despite most users expressing dissatisfaction with Apple Intelligence. A December 2024 survey indicated that approximately 73% of respondents were unhappy with the AI features and felt they did not receive enough value.
Besides, Cook was asked during the earnings call if dedicated AI devices would one day disrupt how people use the iPhone. This was in line with what Meta CEO Mark Zuckerberg stated, that those who do not own a smartglass in the future will be at a significant disadvantage.
Cook said that he doesn’t envision a world without iPhones, though it shouldn’t mean that Apple isn’t thinking about other devices. “I think the devices are likely to be complementary, not substitution,” he said. Besides, reports over the past months have indicated that Apple is intending to integrate AI features into its AirPods and Apple Watch.
Furthermore, during the earnings call, Cook mentioned that the company is reallocating more staff to its AI team to concentrate all of its effort on this initiative.
He said, “We’re very open to M&A (mergers and acquisitions) that accelerates our road map. We are not limited to a specific company size, although the ones we have acquired this year are small in nature. But we basically ask ourselves whether a company can help us accelerate a road map. If they do, then we’re interested,” while also adding that the company does not have anything to share specifically today.
While there have been reports of Apple seeking to acquire Perplexity, and ‘seriously’ considering Mistral — Cook’s comments yet again led to a round of speculation among many.
So, What Will Apple Acquire?
While Perplexity’s CEO, Aravind Srinivas, has stated that the company prefers to stay independent rather than sell itself to a big tech firm, several analysts in the industry have urged Apple to seize the opportunity to acquire Perplexity to bolster its AI initiatives.
Dan Ives, a tech analyst at Wedbush Securities, recently stated in a research note reported by Fortune that Apple should make the ‘no-brainer’ decision to pursue Perplexity, even if it requires spending over $40 billion. “AI technology on the enterprise and consumer landscape is happening at such a rapid pace [that] Apple will not be able to catch up with an internally built solution,” said Ives, and added that Cook needs to ‘rip the band-aid’ off and do an M&A deal.
Perplexity also recently announced Comet, a web browser capable of autonomously performing multi-step tasks using AI, which could be a compelling reason for Apple to look at acquiring the company.
“If Perplexity is not at the top of their list, I don’t know what Apple is doing. Perplexity’s Comet has the ability to beat Safari,” said Vijar Kohli, co-founder at Golden Door.
Apple has also publicly praised Perplexity and its products. In a testimonial during the hearing of the US Justice Department’s lawsuit against Google, Apple’s senior vice president of services, Eddy Cue, said he was impressed by Perplexity’s offerings, and the company was looking to incorporate its AI search capabilities into Safari.
Moreover, in the context of Apple building a new team to develop an app like ChatGPT, Max Weinbach, an analyst at Creative Strategies, said on X that the acquisition of Perplexity will make sense. “Perplexity’s core IP is retrieval for search. They’re a search engine with AI as the layer to directly answer questions,” he said, adding that given that they aren’t a frontier AI lab, Perplexity could offer exactly what Apple needs to integrate and implement AI into workflows.
Besides Perplexity, many believe that Apple should consider Mistral, Cohere, or a much larger organisation like Anthropic.
Ultimately, it all comes down to Apple fulfilling its promise of delivering an upgraded version of its built-in voice assistant, Siri, which forms the crux of Apple Intelligence. While the company promised a more capable and personalised version of Siri in June 2024, the feature has been delayed until 2026.
In a previous interaction with AIM, Weinbach said that if Apple needs to redeem itself, it will need to make the new Siri as advertised at its annual developer conference in 2024. He also noted that in any case, Apple needs “more cloud compute scale and stronger models”.
“Most people seem to think Apple Intelligence is a competitor to Gemini or ChatGPT. It’s fundamentally different. Siri in Apple Intelligence is the competitor, not Apple Intelligence as a whole,” said Weinbach, adding that the company needs to fix Siri first. Cook, in the earnings call, said that the company is making progress on it and is on track to release it next year.
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