Meta Discussed Buying Perplexity Before Investing in Scale

Meta Platforms held discussions with Artificial Intelligence (AI) search startup Perplexity AI Inc. about a possible takeover before moving ahead with a multibillion-dollar investment in Scale AI, according to people familiar with the matter.

The two companies couldn't come to an agreement and decided not to pursue the deal, said the people, who asked not to be named as the details of the talks aren't public. The financial terms under discussion could not be learned. Perplexity recently closed a new round of funding at a $14 billion (roughly Rs. 1,21,438 crore) valuation. 

Meta also attempted to hire Perplexity Chief Executive Officer Aravind Srinivas to join the social media company's new “superintelligence” team, which is focused on building more powerful AI systems, the people said.

The talks with Meta, which have not previously been reported, highlight Meta CEO Mark Zuckerberg's willingness to use deals and big hires to catch up in the AI race. The talks took place before Meta finalised a $14.3 billion (roughly Rs. 1,24,052 crore) investment in Scale AI that gives it a 49 percent stake in the data-labeling startup.

Meta and Perplexity didn't respond to requests for comment.

Founded in 2022, Perplexity has emerged as one of the most prominent startups using generative AI to rethink core internet services. Perplexity is taking on Alphabet Inc.'s Google by offering an AI tool that summarises search results, lists citations for its answers and helps users refine their queries to get the best responses. The startup is also developing an AI-powered web browser.

Frustrated with the pace of Meta's AI development, Zuckerberg is making a concerted push to poach top AI talent from across the industry with lucrative pay packages. Meta has succeeded in hiring Scale AI's former CEO Alexandr Wang, as well as top researchers from Google DeepMind and Sesame AI Inc.

Not everyone is jumping to join Meta, however. OpenAI CEO Sam Altman said in a podcast this week that some on his staff had been approached by Meta with offers of $100 million (roughly Rs. 867 crore) signing bonuses and even bigger compensation packages, but had declined to join the company. 

Meta has been in talks with former GitHub CEO Nat Friedman to recruit him to the new team, according to people familiar with the matter. The company has also been working on hiring Daniel Gross, the CEO of Safe Superintelligence, a research lab founded by former OpenAI chief scientist Ilya Sutskever, the person said. 

Meta has also held early discussions for a computing deal in which Safe Superintelligence would use Meta's data center infrastructure, the person said. Representatives for Safe Superintelligence did not immediately respond to request for comment.

Other Big Tech firms, including Google and Amazon.com, have tried to establish themselves as the backbone of the AI ecosystem by providing chips and cloud computing resources to AI startups. Meta has not gone this route to date.

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