The good news is, Apple has a cash hoard of more than US130-billion and a way out: it can buy its way into the future. The right acquisition could bring in the talent and technology Apple has clearly lacked - as evidenced by the struggles of its Siri voice assistant and its underwhelming generative AI work. This time, transformational M A is exactly what the company needs.
The list of potential targets is both long and eye-wateringly expensive. Perplexity AI is the most likely target, and there have been talks at Apple about such an idea - though no approach yet. Other potential deals might include French AI outfit Mistral the customer-service focused Sierra AI or even either of the OpenAI alumni-founded Super Safe Intelligence or Thinking Machine Labs.
Acquiring any of them would mean Apple's largest-ever M A deal - several multiples bigger than the 3-billion purchase of Dr Dre's Beats headphone company in 2014, a move that was about setting the quick groundwork for a Spotify competitor, Apple Music. Apple, notably, did not buy Spotify, as some at the time thought it might.
There's also another problem: could a deal even be done? The recent trend of big technology companies investing wink wink in AI companies instead of acquiring them outright has come to define recent dealmaking activity in this space. It avoids regulatory scrutiny but comes at the expense of control.
I can't imagine Cook would willingly put himself in the kind of position Microsoft CEO Satya Nadella found himself in when he was caught blindsided by the sudden departure of Sam Altman from OpenAI in November 2023. Nadella's blitz of business news outlets to offer reassurance that everything was totally fine was one of the more humiliating acts I've seen a tech CEO endure. More recently, there are signs that the Microsoft-OpenAI partnership is at risk of falling apart. This kind of unpredictability is unacceptable to Apple, a 3-trillion company built on maniacal control-freakery at every layer.