Let's make a deal. That's been the operating mantra for technology leaders such as Microsoft (MSFT +0.60%), Amazon (AMZN +0.26%), and Google parent Alphabet (GOOG +1.99%) (GOOGL +1.71%) when it comes to artificial intelligence (AI).
Microsoft turned plenty of heads with its $10 billion investment in ChatGPT developer OpenAI in early 2023. Google bought DeepMind in 2014 and picked up a 10% stake in Anthropic last year. Amazon followed up with its own $4 billion investment in Anthropic only a few days ago.
But are these companies the busiest on the AI acquisitions front? Nope. One tech giant has made more AI deals than any of them over the last six years.
The quiet leader in AI acquisitions
You might say that Apple (AAPL +2.65%) is following the old adage espoused by Teddy Roosevelt to "speak softly and carry a big stick" with its AI efforts. Microsoft, Amazon, and Google have trumpeted their AI initiatives, but Apple executives don't talk all that much about AI.
NASDAQ: AAPL
Key Data Points
Of course, Apple has invested heavily in AI for years. It acquired AI-powered assistant Siri way back in 2010. In the company's recent product launch, it rolled out new iPhone and Apple Watch versions that incorporated key improvements made possible by AI.
An article in The Information published last month revealed that Apple is spending millions of dollars every day on AI development. In particular, the company is reportedly building a new large language model for generative AI called Ajax.
Perhaps most tellingly, though, Apple is the clear leader in the volume of AI acquisitions completed since 2017. Market research firm Pitchbook noted that Microsoft made 12 acquisitions over the last six years, while Alphabet completed eight. But Apple is ahead of these and several other companies with 21 AI acquisitions.
Apple's biggest AI deals
The dollar amounts of all of Apple's AI investments haven't been made public. We do know, however, a little about several of the company's biggest AI deals.
For example, in 2018, Apple acquired Laserlike for $150 million. Laserlike was a start-up at the time that developed software that searches the web and delivers results using machine learning. The small company was founded by three former Google engineers.
Apple bought PullString in early 2019 for $30 million. PullString, which was started by former Pixar executives, developed AI voice technology. It originally focused on powering voice-enabled toys, such as a talking Barbie doll and Thomas the Tank Engine.
In mid-2019, Apple shelled out $77 million to scoop up Drive.ai. As you might have surmised from its name, Drive.ai developed self-driving car technology. The company was only days away from going out of business when Apple came to the rescue.
Apple closed one of its largest AI acquisitions in January 2020 with the $200 million purchase of Xnor.ai. The Seattle-based start-up developed edge-based AI tools that can run on low-power devices instead of having to operate using the cloud.
Quantity vs. quality
We can't automatically assume that Apple is quietly beating Microsoft, Google, Amazon, and others in AI just because it's made more AI acquisitions in recent years. It's the quality of the deals that matters much more than the quantity, whether we're talking about the transaction volumes or price tags.
What investors can glean from all of this, though, is that the big tech companies hold major advantages as the AI boom continues. They're not only investing a lot of money in internal AI development; they're also investing in smaller AI companies -- in many cases, acquiring those companies outright. Ten years from now, there's a good chance that Apple, Microsoft, Amazon, and Google will remain among the top leaders in AI.
