Apple CEO Tim Cook speaks during Apple’s “Awe-Dropping” event at the Steve Jobs Theater on the Apple Park campus.” width=”970″ height=”647″ data-caption=’Tim Cook’s steady dealmaking shows Apple’s preference for buying A.I. talent over entire companies. <span class=”lazyload media-credit”>NIC COURY/AFP via Getty Images</span>’>
At some point during the rapid development of any new technology, consolidation is inevitable. Big players eventually buy out smaller competitors or crowd them out by capturing market share. In the current A.I. boom, large firms are taking this further through a strategy known as an “acqui-hire,” where a company purchases a smaller firm mainly to absorb its talent, often shutting down the acquired company’s product afterward.
Big Tech giants like Meta and Google have struck billion-dollar deals in this category: Meta’s $14 billion investment in Scale AI, Google’s $2.7 billion stake in Character.AI, and its $2.4 billion deal with Windsurf, to name a few. But the true master of this playbook is Apple, which has quietly acquired more than 100 companies since 2010—most too small to warrant a press release.
Aside from its $3 billion acquisition of Beats Electronics in 2014 and the $1 billion purchase of Intel’s smartphone modem business in 2019, Apple rarely makes large public deals. Yet CEO Tim Cook has said Apple buys companies “every two to three weeks.”
Its latest target appears to be a 10-person computer vision startup called Prompt AI, CNBC reported last week. Founded in 2023 by a team of UC Berkeley researchers, the San Francisco–based company has raised only $5 million in venture capital and was last valued at between $50 million and $60 million, according to PitchBook data.
Prompt AI’s main product is an app called Seemour. It connects home cameras to create a more sophisticated understanding of space. Its technology enables cameras to recognize people, pets and objects, alert homeowners to unusual activity, and even answer questions about what’s happening in view. The company describes itself as building “machines that sense the world just like you.” According to CNBC, Prompt’s technology and talent are expected to join Apple’s HomeKit smart home division. Prompt AI could not be reached for comment.
Apple’s acqui-hire playbook
Unlike traditional acquisitions, the main goal of an acqui-hire is talent, not technology. “Acqui-hires let Big Tech firms rapidly capture specialized talent while avoiding the cost, regulation and complexity of traditional acquisitions,” Ben Boissevain, founder of Ascento Capital Invest, an investment bank specializing in advising on tech M&A deals, told Observer. “[They were] specifically got used in recent A.I. acquisitions because the breakthrough ideas come from a few talented top engineers.”
Apple’s best-known deal of this kind is arguably its 2010 purchase of Siri. The company absorbed Siri’s founding team, including co-founders Dag Kittlaus and Adam Cheyer, to develop its own voice assistant. However, unlike a typical acqui-hire, Apple retained Siri’s product and built it into its ecosystem.
Other notable A.I.-related acqui-hires include Emotient, a San Diego-based company that used A.I. to analyze facial expressions and infer emotions. Apple acquired it in 2016 to enhance its facial recognition technology. That same year, Apple also “acqui-hired” two machine learning startups, Turi and Tuplejump, whose key engineers joined Apple’s internal A.I. teams.
Being acquired by a company like Apple often marks a victory for a startup’s investors, but the quicl exit offered by an acqui-hire comes with its own tradeoffs. If the Prompt AI deal goes through, its investors will receive some payout but likely not recover their full investment, CNBC reported. Shareholders typically see modest returns compared to full takeovers,” Boissevain said, adding that acqui-hire deals also often come with retention risks. “Employees benefit from higher pay and infrastructure but often lose autonomy and startup culture, which can lead to burnout or attrition within a few years,” he said.
—Apple’s suite of consumer-facing A.I. offerings, Apple Intelligence, has faced skepticism for lacking truly groundbreaking features. But Cook has hinted the company is far from done making A.I. moves. In July, he said Apple had acquired seven smaller companies in 2025 so far and remained open to larger deals, adding, “We are not stuck on a certain size company.” Cook characterized Apple’s acquisition strategy as augmenting its capabilities—especially in A.I.—consistent with its long-standing preference for buying teams and technology rather than revenue.
“Apple may surprise us with a large acquisition of a company like Perplexity, which is valued between $14 billion and $18 billion, Boissevain speculated on the high-flying A.I. answer engine maker, “which would be an excellent strategic fit, potentially powering Siri, Spotlight and Safari with A.I.-native capabilities.”
