It’s time for Apple to buy—not build—its way into AI

Raise your hand if you've heard this one before:

Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.

Those 19 words—one imagines them etched in stone somewhere at Apple HQ in Cupertino, Calif.—have served as Apple's standard statement about acquisitions for years (to the point that tech reporters can recite the phrase from memory).

As far as PR statements go, it's actually a pretty accurate description of Apple's approach to M&A. With the exception of 2014's still-perplexing $3 billion Beats acquisition, Apple likes to buy companies that are small and relatively low profile—typically they're the early pieces of whatever, longer-term technological puzzle Apple is quietly assembling (which could be anything from the VisionPro to its own line of in-house microprocessors).

The problem for Apple is that there's only one tech puzzle to assemble that matters today: generative AI. It's a game changer, with the power to upend even the most dominant of business models. And it's too late for Apple to start putting that puzzle together on its own. Its biggest competitors, including Microsoft, Google, Meta, and Amazon, have already released AI products, while Apple is nowhere to be seen.

To be a superpower in the age of AI probably requires owning a cutting-edge large language model. That's not something you can easily build from scratch—especially if you're trying to build version 1.0 and OpenAI is already about to release GPT 5.0.

All of this is to say that this is not one of those "from time to time" moments in which Apple has the luxury to leisurely collect small AI startups here and there. If there was ever a time when Apple needed to "think different," and buy its way into the market by acquiring a large company with a working product, this is it.

There's plenty to choose from—Anthropic, Cohere, and Mistral, to name a few. On the video side of things, there's Runway. Just a few weeks ago, Inflection AI sold its IP to Microsoft, and much of its AI talent, including cofounder Mustafa Suleyman, joined Microsoft. How different would the landscape look right now if Apple had snagged the Inflection team?

Antitrust is obviously a risk. But Apple can point to a market full of big fish like Microsoft, Google, Meta, Amazon, and Adobe.

It's not as if Apple doesn't have the money. Apple ended the most recent quarter with $58 billion in net cash, and it's giving billions back to shareholders in massive buybacks and dividends. With AI about to transform the tech industry, it's stunning that one of the most innovative companies on Earth can't think of a better use for that capital.

Apple CEO Tim Cook has promised to unveil some kind of generative AI product this year—most likely at its global developer conference in June. If Cook pulls an AI rabbit out of his hat, and Apple goes from laggard to contender in an instant, it will be a spectacular move that will cement his legacy as a business leader.

If Apple doesn't have that rabbit though, the longer it waits to buy its way into AI, the further it will fall behind in a very high-stakes game.

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Alexei Oreskovic

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Today's edition of Data Sheet was curated by Rachyl Jones.

This story was originally featured on Fortune.com