Apple has acquired an AI company, outbidding Elon Musk.
For an undisclosed amount Apple appears to have purchased Prompt AI.
Company leaders informed employees at a meeting on Thursday that an agreement with Apple was forthcoming. CNBC heard audio from the meeting indicating that employees who do not transition to Apple will have their pay reduced and should seek other positions at the company.
Apple reportedly won out against xAI and Neuralink, among other AI firms, to acquire Prompt AI. Executives stated during the meeting that investors in Prompt AI will receive partial compensation, but not a full return on their original investment. Employees were instructed to avoid mentioning Apple when discussing their job search or situation with others.
Prompt AI's CEO, Tete Xiao, told employees that while the company's technology and the Seemour app function properly, the business model is not viable. Consequently, the Seemour app will be discontinued, and user data will be deleted with privacy protections in place. The acquired talent and technology are expected to integrate into Apple’s HomeKit division.
The Seemour app was previously available on the App Store, but its removal suggests the acquisition of Prompt AI by Apple.
Apple aims to gain AI talent from Prompt AI, which has 11 employees, and its technology. The transaction's value remains undisclosed. Apple typically avoids large acquisitions, with its largest being the $3 billion acquisition of Beats Audio in May 2014.
While acquiring the Beats headphones division, Apple also sought the Beats Audio streaming service, which had 111,000 subscribers before becoming Apple Music. Apple Music had 108 million subscribers in Q1 2025.
Apple has faced criticism for lagging in AI development. The launch of Apple Intelligence has been problematic, with key features linked to Siri being delayed. A "personal Siri" feature, enabling Siri to analyze the iPhone display and retrieve information from various apps, is expected with iOS 26.4 next spring.
Despite mixed reviews on generative AI, Apple's Vision Pro spatial computer impressed many with its technology. While the $3,499 price deterred some, the computer vision technology in the headset is considered successful, with iPhones identifying pets, people, and objects in user photos.
Apple's stock decreased by $8.77 (3.45%) today, but the decline is likely unrelated to the potential acquisition. The U.S. announced increased tariffs on Chinese imports, potentially raising costs for U.S. consumers and impacting Apple product affordability.
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