After years of lagging behind in artificial intelligence, Apple (AAPL) may be preparing to leap forward.
The company is reportedly exploring a high-stakes partnership—or even a full acquisition—of Perplexity AI, an emerging player in the AI-powered search and chatbot market.
According to a recent research note from Bank of America Securities, Apple is reportedly weighing its options with Perplexity, and a deal could help turn the tide for a company that has, until now, been seen as slow to embrace next-generation AI capabilities.
Siri, once a trailblazer in voice technology, has fallen behind more conversational, context-aware assistants like OpenAI’s ChatGPT and Google’s (GOOG) Gemini. A partnership with Perplexity could address those gaps. Perplexity’s platform offers nuanced Q&A interactions, memory of user prompts across follow-up questions, and the ability to carry out multi-step tasks—precisely where Siri still struggles.
The move comes amid growing investor frustration with Apple’s AI rollout. At its June 9 developer conference, Apple failed to provide a concrete timeline for Siri’s full AI integration, dampening enthusiasm. Analysts at BofA argue that Perplexity’s core strengths could inject new life into Apple’s AI roadmap and shift market sentiment. Apple shares, down about 19% year-to-date, have underperformed broader indexes—a stark contrast to the tech rally driven by other AI leaders.
However, a deal isn’t without risks. Acquiring Perplexity could strain Apple’s longstanding business relationship with Google, which currently provides the default search engine in Safari. There are also legal uncertainties: Perplexity is currently embroiled in a lawsuit from News Corp over alleged copyright infringement. Still, if it goes forward, such an acquisition would be the largest in Apple’s history—a signal that the company is serious about redefining its AI future.
Apple’s Chip Roadmap: Racing to 2‑Nanometre Silicon
Beyond software, Apple is also pushing the envelope in hardware innovation. The company is preparing to transition much of its product line to 3-nanometer chips this year, with an ambitious plan to introduce 2-nm semiconductors by late 2026. Taiwan Semiconductor Manufacturing Company (TSM), Apple’s exclusive foundry partner, will be responsible for producing the ultra-advanced chips. According to Counterpoint Research, this move is driven largely by the need to handle more complex on-device AI features efficiently and securely.
Shrinking chip size brings several performance benefits: better power efficiency, faster processing, and enhanced capacity to manage AI workloads locally. That could be key to unlocking real-time voice assistants, personalized recommendations, and AI photography—all without needing a constant cloud connection.
But this transition doesn’t come cheap. Counterpoint notes that system-on-chip costs are rising due to the high price of wafers and the added complexity of design and testing. Still, Apple’s deep pockets and tight control over its hardware ecosystem give it a critical edge. By integrating advanced chips directly into its devices, Apple could achieve levels of optimization that competitors reliant on off-the-shelf components may struggle to match.
In the battle for next-generation hardware leadership, Apple is betting that its early and deep investment in 2-nm technology will yield a powerful competitive advantage—one that enables more intelligent, responsive, and power-efficient devices in the AI era.
Beyond software, Apple is also pushing the envelope in hardware innovation. The company is preparing to transition much of its product line to 3-nanometer chips this year, with an ambitious plan to introduce 2-nm semiconductors by late 2026. Taiwan Semiconductor Manufacturing Company (TSM), Apple’s exclusive foundry partner, will be responsible for producing the ultra-advanced chips. According to Counterpoint Research, this move is driven largely by the need to handle more complex on-device AI features efficiently and securely.
Shrinking chip size brings several performance benefits: better power efficiency, faster processing, and enhanced capacity to manage AI workloads locally. That could be key to unlocking real-time voice assistants, personalized recommendations, and AI photography—all without needing a constant cloud connection.
But this transition doesn’t come cheap. Counterpoint notes that system-on-chip costs are rising due to the high price of wafers and the added complexity of design and testing. Still, Apple’s deep pockets and tight control over its hardware ecosystem give it a critical edge. By integrating advanced chips directly into its devices, Apple could achieve levels of optimization that competitors reliant on off-the-shelf components may struggle to match.
In the battle for next-generation hardware leadership, Apple is betting that its early and deep investment in 2-nm technology will yield a powerful competitive advantage—one that enables more intelligent, responsive, and power-efficient devices in the AI era.
Intel’s Foundry Push: Gaining on TSMC
While Apple deepens its hardware integration, Intel (INTC) is making its own strategic pivot—this time back to relevance in the global semiconductor foundry market. For decades, Intel dominated in CPUs, but in recent years, it fell behind as rivals like TSMC and Samsung became the go-to fabs for advanced chip production. Now, the company is staging a comeback.
While Apple deepens its hardware integration, Intel (INTC) is making its own strategic pivot—this time back to relevance in the global semiconductor foundry market. For decades, Intel dominated in CPUs, but in recent years, it fell behind as rivals like TSMC and Samsung became the go-to fabs for advanced chip production. Now, the company is staging a comeback.
A fresh report from Counterpoint Research puts Intel’s foundry market share at 6.5% in Q1 2025—up from 5.9% the previous quarter. Though TSMC remains dominant with a 35.3% share, Intel is making meaningful progress, particularly through its 18A process node, which is central to its goal of attracting third-party customers. Analysts believe this could help Intel gain momentum in supplying chips for AI, data centers, and high-performance computing.
The broader geopolitical environment is also working in Intel’s favor. With rising tensions between China and Taiwan, investors and governments alike are looking to diversify away from East Asian supply chains. Intel’s U.S.-based manufacturing and recent federal support under the CHIPS Act make it a key piece of this realignment.
Meanwhile, the company is undergoing a major operational overhaul. Intel recently announced it will outsource much of its marketing to Accenture, leveraging the consulting giant’s AI tools to improve efficiency and reduce costs. In 2024 alone, Intel spent over $850 million on advertising and $5.5 billion on general administration. Streamlining these operations could free up capital for R&D and production improvements.
Despite skepticism from some analysts, Intel’s stock has surged—up over 6% in a single day—on growing optimism about its restructuring and market positioning. If its 18A process delivers on yield and performance, and if global demand continues to shift toward local semiconductor manufacturing, Intel could re-emerge as a serious competitor in the foundry space.
Conclusion
Apple and Intel are navigating the AI era from different vantage points—one through software partnerships and cutting-edge chips, the other through manufacturing reinvention and strategic cost-cutting. Yet both are betting heavily on a future where artificial intelligence isn’t just a feature but a core business driver. For investors, these moves suggest that while the headlines may favor flashier AI startups, the old guard of tech still has a few transformative plays left.
Apple and Intel are navigating the AI era from different vantage points—one through software partnerships and cutting-edge chips, the other through manufacturing reinvention and strategic cost-cutting. Yet both are betting heavily on a future where artificial intelligence isn’t just a feature but a core business driver. For investors, these moves suggest that while the headlines may favor flashier AI startups, the old guard of tech still has a few transformative plays left.
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