Apple buys Israeli startup Q.ai as the AI race heats up

Apple, Meta, and Google are increasingly locked in a competitive race to lead the next phase of artificial intelligence, with a growing emphasis on hardware-driven AI. Apple’s latest move in that contest is the acquisition of AI startup Q.ai, a deal aimed at strengthening the company’s position in audio and sensory AI technologies.

As first reported by Reuters, Apple has acquired Q.ai, an Israeli startup focused on imaging and machine learning technologies. The company specialises in systems that allow devices to interpret whispered speech and improve audio clarity in noisy environments. Apple has already been expanding AI-powered features in its AirPods lineup, including the live translation functionality introduced last year.

Beyond audio, Apple has also been developing technology to detect subtle facial muscle movements. Such capabilities could be used to enhance user interaction with products like the Apple Vision Pro, Apple’s spatial computing headset.

According to a Financial Times report, the acquisition is valued at nearly $2 billion. If confirmed, that would make it Apple’s second-largest acquisition ever, behind its $3 billion purchase of Beats Electronics in 2014.

The deal also marks the second time Apple has acquired a company founded by Q.ai CEO Aviad Maizels. In 2013, Apple acquired PrimeSense, a 3D-sensing startup led by Maizels, which played a significant role in Apple’s shift from fingerprint authentication to Face ID on the iPhone.

Q.ai was founded in 2022 and has received backing from major investors, including Kleiner Perkins and Gradient Ventures. As part of the acquisition, the startup’s founding team — Maizel, Yonatan Wexler, and Avi Barliya — will join Apple.

The announcement comes just hours ahead of Apple’s upcoming quarterly earnings report. Analysts are forecasting revenue of roughly $138 billion for the quarter, with expectations that it will mark the company’s strongest iPhone sales growth in the past four years.