Wedbush analyst: Apple cannot achieve AI innovation on its own; the $40 billion acquisition of Perplexity is the only way out

Wedbush analysts released a report stating that Apple Inc. is unable to achieve breakthroughs in artificial intelligence through internal development and suggested that the company spend $40 billion to acquire the AI search platform Perplexity to catch up with competitors.

Analysts indicated that Apple's difficulties in AI innovation are "obvious," and it must seek external solutions. This suggestion comes as Apple is about to release its financial report, with investors increasingly concerned about the company's slow progress in AI development.

According to AppleInsider, although Apple is expected to mention the AI features it is developing in today's financial report, analysts have expressed clear doubts about its internal development capabilities. Previous reports indicated that Apple had negotiated to acquire Perplexity when the company was valued at $14 billion.

If Apple indeed acquires Perplexity for $40 billion, this would far exceed its largest acquisition to date—the $3 billion purchase of Beats in 2014—and would become one of the most expensive AI-related acquisitions in the tech industry.

Analysts Question Apple's Internal AI Capabilities, Perplexity Becomes Acquisition Target

Wedbush analysts stated in the report that Apple's innovation in artificial intelligence "cannot be achieved internally." This judgment reflects Wall Street's concerns about Apple's AI strategy. Analysts believe that while Apple can refine services at a lower cost through internal teams, it cannot guarantee success in this area.

Analysts recommend that Apple acquire Perplexity and its AI platform, viewing it as a necessary step to catch up with competitors. Previous reports indicated that Apple had engaged in negotiations with Perplexity regarding the acquisition.

Reports suggest that in early negotiations, Perplexity was valued at around $14 billion. If the deal is finalized at $40 billion, it would mean a significant increase in the company's valuation.

The $40 billion acquisition price would set a record for Apple. The company's previous largest acquisition was the $3 billion purchase of headphone manufacturer Beats in 2014.

Such a large acquisition amount has raised market skepticism, considering Apple's historical caution regarding large acquisitions. However, Apple has ample cash reserves, providing a financial foundation for potential large-scale acquisitions.

Analysts stated that although $40 billion is "an unimaginable amount of money" for many companies, Apple's financial strength makes this deal theoretically feasible. It remains unclear what the specific stance of Apple's management is regarding such acquisition proposals