Apple Inc.’s quest to supercharge its artificial intelligence capabilities has intensified in 2025, with the company facing mounting pressure to catch up to rivals like Google and Microsoft. Recent reports suggest that while Apple has explored acquiring Perplexity AI, a startup known for its innovative search engine, that deal may not materialize due to concerns over data practices and escalating costs. Instead, Apple is eyeing a broader array of targets to bolster Siri and its ecosystem, drawing on its massive cash reserves exceeding $55 billion to fuel aggressive moves.

This shift comes amid a year of strategic pivots for the iPhone maker, which reported $94 billion in third-quarter revenue, providing ample firepower for mergers and acquisitions. Analysts argue that without bold action, Apple risks falling further behind in the AI race, where competitors are integrating advanced models into everyday products.

Exploring Alternatives in Generative AI

One prominent option is Anthropic, the developer behind the Claude AI model, which emphasizes safety and ethical AI development. According to insights from The Globe and Mail, Anthropic stands out as a top generative AI contender not yet tied to a tech giant, potentially offering Apple a way to enhance privacy-focused features. The startup’s valuation could command a premium, but Apple’s history of talent acquisitions makes it a logical fit.

Cohere, another Canadian firm specializing in enterprise AI models, has also surfaced in discussions. WebProNews highlights Cohere as a target that aligns with Apple’s push for on-device processing, given its focus on efficient, customizable language models that prioritize data security.

Smaller Startups and Talent Plays

Beyond these heavyweights, Apple could target smaller entities like Mistral AI, a French startup gaining traction for its open-source models. Posts on X from industry insiders, including Bloomberg’s Mark Gurman, indicate Apple has internally discussed Mistral as part of its M&A strategy, potentially allowing for quicker integration into iOS without the regulatory scrutiny of larger deals.

Runway ML, known for video generation tools, represents another avenue, especially as Apple seeks to expand creative AI in apps like Final Cut Pro. The 9to5Mac analysis posits that acquiring such specialized firms could provide niche expertise, complementing Apple’s seven AI-related deals already completed this year, as detailed in various reports.

Regulatory Hurdles and Strategic Risks

However, any acquisition faces challenges, including antitrust reviews that have grown stricter under global regulators. Ainvest notes the risks of cultural clashes and high talent retention costs, yet argues that targets like Perplexity alternatives are “no-brainers” for Apple’s ecosystem scale.

Investor sentiment, echoed in X posts from analysts like Dan Ives of Wedbush Securities, underscores the urgency: Apple must act decisively or risk market cap erosion. Ives has publicly advocated for deals in the $30 billion range to rival ChatGPT’s dominance.

The Path to AI Dominance

Looking ahead, Apple’s strategy may involve a mix of acquisitions and partnerships, building on its OpenAI collaboration while seeking proprietary tech. As Forbes suggests, integrating advanced AI could deliver the “wow” factor Apple is famous for, potentially transforming Siri into a true orchestration platform.

Ultimately, with internal talks ongoing—as reported by Bloomberg—Apple’s next move could redefine its competitive edge. By targeting firms like Anthropic or Cohere, the company aims not just to acquire technology, but to infuse its products with cutting-edge innovation that resonates with privacy-conscious users worldwide. This approach, backed by robust finances, positions Apple to navigate the evolving AI terrain effectively, even if Perplexity remains off the table.