In a recent note released on Wednesday, Wedbush analyst Dan Ives suggested that Apple should consider a strategic acquisition of Perplexity, a company known for its innovative AI search engine. This recommendation is particularly timely as Apple aims to bolster its much-anticipated AI-enhanced version of Siri, which has unfortunately faced delays and is not expected to debut until 2026.

Ives emphasized that acquiring Perplexity would not only align with Apple’s long-term AI ambitions but also significantly enhance the capabilities of its virtual assistant, Siri. He pointed out that, given the current valuation of Perplexity at approximately $14 billion, Apple might need to offer more than double that figure to secure the deal. Ives believes that even a price tag of around $30 billion would be a minor investment relative to the enormous monetization potential that AI offers.

The competitive landscape for artificial intelligence has intensified, with companies like Alphabet's Google and OpenAI making considerable advancements in AI technology. Ives metaphorically described Apple's position as being “at a highway rest stop on a bench,” indicating a sense of stagnation compared to its more agile competitors. He argued that Apple should “rip the band-aid off” and move forward with the acquisition of Perplexity, which boasts some of the most advanced AI algorithms in the technology sector.

Perplexity, which is currently a private company, has been gaining traction with its AI-driven search capabilities. Apple’s investors and analysts have expressed growing concerns over the delay in launching an upgraded Siri, which was initially expected to be released as early as this spring. The company’s recent announcements have pushed the timeline for this launch to 2026, disappointing many stakeholders.

In an effort to bolster its AI capabilities, Apple has also explored partnerships with other AI leaders such as OpenAI, the creator of ChatGPT, and Anthropic, the developers behind Claude. Notably, Siri users can now access ChatGPT on select iPhone models, showcasing Apple's willingness to integrate external AI technologies.

In a related development, Perplexity unveiled a new AI-powered web browser named Comet on Wednesday, aiming to compete with established players like Google Chrome. This browser is exclusively available to subscribers of Perplexity Max, which carries a monthly subscription fee of $200.

Compounding Apple’s challenges in the AI domain, the company recently lost a key executive, Ruoming Pang, who headed its foundation models team, to Meta Platforms, Inc. (META). Reports indicate that Pang was offered a lucrative package worth tens of millions of dollars to join Meta's ambitious “Superintelligence” team led by CEO Mark Zuckerberg, who has expressed frustration with Meta's slow progress in AI development.

As of Wednesday, Apple’s stock remained relatively stable at around $211, although it has experienced a decline of approximately 16% for the year 2023, positioning it as the second worst performer among the so-called Magnificent Seven tech stocks, just behind Tesla (TSLA).