Apple is currently engaged in advanced discussions to acquire leading talent from the computer vision startup Prompt AI, along with its technology, as per CNBC’s findings.
Prompt’s leadership informed staff about the expected deal during an all-hands meeting last Thursday, indicating that those who do not transition to Apple will receive a reduced paycheck, and were encouraged to explore open roles within the company, based on an audio recording obtained by CNBC.
The company, consisting of 11 members, had been approached by various other interested parties, including Elon Musk’s xAI and Neuralink, as executives mentioned in the meeting.
Founded in 2023, Prompt secured a $5 million seed funding round that year, spearheaded by AIX and Abstract Ventures. Its co-founders are CEO Tete Xiao, a prominent AI researcher with a Ph.D. in computer science from UC Berkeley, and President Trevor Darrell, who co-founded the Berkeley Artificial Intelligence Research (BAIR) lab.
Neither Xiao nor Darrell responded to comment requests, nor did Apple. xAI and Neuralink also did not immediately reply to inquiries for comment.
Investors will receive some compensation from the deal, although “won’t be made whole,” as stated by executives during the meeting. Prompt employees were instructed to avoid mentioning Apple while they search for other employment or update friends and family on their circumstances.
Prompt’s key application, Seemour, connects to residential security cameras, enhancing their capabilities. The technology enables cameras to recognize specific individuals, pets, and other animals or objects within a home, sending alerts and text descriptions of unusual activities or addressing questions about recent events in front of the camera.
Xiao told employees during the meeting that while the technology of Prompt AI and the Seemour app were performing well, the business model was not sustainable. The company plans to retire the Seemour app and inform users that their data will be deleted and privacy will be safeguarded, according to executives.
Tech giants in Silicon Valley have been actively acquiring top AI talent through acquihires, partly to enhance their AI research and development while navigating regulatory challenges. Apple’s acquisition of Prompt is significantly smaller compared to recent high-profile deals, such as Meta’s $14.3 billion investment in Scale AI, which included the company’s founder and other executives, and Google’s $2.4 billion agreement for Windsurf’s CEO and other leaders, which involved licensing fees.
Apple has historically steered clear of large acquisitions. Over its half-century existence, the most substantial purchase Apple made was the $3 billion deal for Beats Electronics in 2014. The company tends to discreetly acquire smaller teams to utilize their talent and technology to enhance its product offerings.
Some analysts link Apple’s relatively slow evolution in AI to its reluctance to engage in significant acquisitions. This year, its stock has dropped 2%, significantly lagging behind major indices and exhibiting the worst performance among leading tech companies.
While Apple Intelligence, the iPhone maker’s move into generative AI, has not met expectations and faced delays, the company has achieved technical success in computer vision, particularly within its mixed reality headset, Vision Pro. The iPhone also possesses the capability to recognize the objects, individuals, or pets in photographs taken by users.
Technologies and personnel from Prompt are expected to integrate into Apple’s HomeKit smart home division.
— CNBC’s Kif Leswing contributed to this report.
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