Apple finds itself at a critical crossroads in the AI race: The company is working on its own homegrown solutions, using both Siri, its smart assistant, and Apple Intelligence, its attempt to bake AI directly into the entire Apple ecosystem. But despite analysts increasingly urging the tech giant to make bold acquisitions, Apple is reportedly working on its own AI-powered search solution for the web, like Perplexity or ChatGPT, that could launch as early as next March.
According to Bloomberg’s Mark Gurman, who has deep connections within Apple, the company plans to launch an AI-powered search feature called World Knowledge Answers, integrated into Siri, by early next year. This system will function as an “answer engine,” similar to ChatGPT and Google’s AI overviews, providing summarized responses to search queries.
The new Siri architecture represents a complete rebuild using large language models, moving away from the first-generation system that Apple couldn’t make work properly. The company has been testing partnerships with Google for AI models, while keeping its own models for processing user data to maintain privacy standards.
Apple’s approach differs significantly from competitors, who have invested tens of billions in AI cloud infrastructure. Instead, the company maintains its “asset-light strategy,” focusing on on-device processing and selective partnerships rather than massive data-center investments.
Under (AI) pressure
Apple’s struggles in AI have become painfully evident to Wall Street observers. While the company’s stock has rebounded recently, only down roughly 2.5% year to date, it’s the worst performer among all Magnificent Seven stocks and the only one with a negative return so far this year. This disappointing performance comes as competitors like Nvidia and Microsoft have surged to new highs, capitalizing on the AI boom that Apple has seemingly watched from the sidelines.
Prominent analysts, led by Wedbush Securities’ Dan Ives, have repeatedly called for Apple to acquire Perplexity, the fast-growing AI search engine that has captured significant market attention. Ives described such a deal as a “no-brainer” that could cost Apple around $30 billion for a company currently valued at approximately $18 billion to $20 billion. The acquisition would provide Apple with an immediate AI search capability that could transform both Siri and Safari, giving the company a legitimate competitor to Google’s search dominance. Perplexity even has its own web browser now, called Comet, and it’s mighty impressive in its own right.
“With the AI revolution, Apple is on the outside looking in,” Ives told Investor’s Business Daily, adding, “This is an F1 race at Monza in Italy, and [CEO Tim] Cook is watching it from the stands.”
Perplexity has demonstrated remarkable growth, processing 780 million queries as of May with more than 20% month-over-month growth. The company now boasts 22 million active users and has achieved $150 million in annual recurring revenue, up from just $35 million a year earlier. This trajectory has attracted significant investor interest, with backing from Nvidia, SoftBank, and Jeff Bezos.
The broader AI search revolution
The shift toward AI-powered search represents a fundamental change in how users find information online. Recent surveys indicate that 83% of users prefer AI search tools over traditional Google searches, citing efficiency and the ability to receive comprehensive answers without clicking through multiple links.
This trend has created opportunities for companies like Perplexity and OpenAI, which recently announced plans to launch its own AI-powered browser to challenge Google Chrome. OpenAI’s browser is expected to leverage ChatGPT’s 500 million–plus weekly active users to pressure Google’s advertising revenue stream, which accounts for nearly 75% of Alphabet’s income.
Google’s search market share has begun to show cracks, falling below 90% for the first time since 2015. While multiple factors contribute to this decline, the growing popularity of AI-driven search tools appears to be a significant driver of change.
Getting Siri-ous about AI
Apple has historically preferred organic growth and smaller, technology-focused acquisitions rather than large strategic purchases. Its largest acquisition to date remains the $3 billion purchase of Beats in 2014.
However, the AI revolution may require Apple to abandon this cautious approach. With a market capitalization exceeding $3 trillion and annual share buybacks of $100 billion, the company certainly has the financial resources to make transformative acquisitions.
The timeline for Apple’s internal AI search solution suggests the company believes it can compete without major acquisitions. If successful, the March 2026 launch of enhanced Siri capabilities could address many investor concerns and demonstrate that Apple’s patient approach to AI development can still yield competitive results.