Apple Nears Deal to Acquire Talent and Technology From AI Startup Prompt AI

Key Highlights

• Apple is in late-stage talks to acquire engineers and technology from Prompt AI, a computer-vision startup.
• Prompt AI was founded in 2023 by Tete Xiao and Trevor Darrell, researchers associated with UC Berkeley.
• The startup raised about $5 million in seed funding in 2023.
• Apple is primarily pursuing an “acqui-hire” deal focused on talent and technology, not a full company purchase.
• Prompt’s flagship app Seemour, used with home security cameras, is expected to be retired.

Apple in Talks to Acquire Prompt AI Talent and Technology

Apple is nearing a deal to acquire engineers and technology from Prompt AI, an early-stage startup focused on computer vision. The transaction is expected to center on bringing the company’s talent and technical expertise into Apple rather than acquiring the entire business.

Leadership at Prompt informed employees about the potential transaction during an internal meeting. Employees who do not join Apple may receive reduced compensation and are encouraged to apply for open positions at Apple.

The startup reportedly attracted interest from other potential buyers as well, including Elon Musk-linked companies xAI and Neuralink, though Apple appears closest to finalizing the agreement.

About Prompt AI and Its Technology

Prompt AI was founded in 2023 by CEO Tete Xiao, a computer-vision researcher with a PhD in computer science from the University of California, Berkeley and Trevor Darrell, a founder of the Berkeley Artificial Intelligence Research (BAIR) lab.

The company developed a product called Seemour, an application designed to connect with home security cameras and enhance them with AI-based visual intelligence capabilities.

The technology can detect specific people, pets, or objects around a home and provide alerts or text-based descriptions about unusual activity captured by cameras.

Despite the functionality of the technology, company leadership reportedly told employees that the business model behind Seemour was not sustainable, leading to the decision to retire the app. Users are expected to be notified that their data will be deleted to protect privacy.

Investors Likely to Receive Partial Returns

Prompt AI raised seed funding of around $5 million from investors including AIX Ventures and Abstract Ventures in 2023.

Executives indicated that investors will receive some payout from the transaction but are unlikely to recover their full investment, suggesting the deal is primarily focused on acquiring the team rather than the startup’s full valuation.

Apple’s Strategy: Acquiring Talent Instead of Large Companies

Apple has historically favored smaller acquisitions that bring specialized teams and technology into the company rather than large-scale takeovers.

The company’s biggest acquisition remains the $3 billion purchase of Beats Electronics in 2014, while many other deals involve quietly absorbing startup teams to strengthen Apple’s internal research and development.

If the Prompt AI deal proceeds, the startup’s engineers and technology are expected to contribute to Apple’s AI and smart-home initiatives, potentially including its HomeKit ecosystem and computer-vision capabilities.