A mixed reality headset at an Apple store in New York<\/p>\n
Anadolu via Getty Images<\/p>\n
Apple<\/a> acquired secretive AI facial recognition startup Q.AI<\/a> for nearly $2 billion, the Financial Times reported Thursday, making it Apple\u2019s largest known acquisition since its purchase of Beats Electronics<\/a> for $3 billion in 2014.<\/p>\n Buying Q.AI, a Tel Aviv-based company that uses computer vision technology to understand non-verbal cues, marks a clear effort by Apple to catch up to its biggest rivals, like Meta and OpenAI,<\/a> in an AI hardware race.<\/p>\n Apple is still playing catch-up<\/a>, after seemingly underinvesting in its AI assistant, Siri, over the years, while competitors grew to unprecedented scales. Last year, the iPhone maker even considered making bids for large language model companies Perplexity<\/a> and Mistral AI<\/a>.<\/p>\n For Q.AI and its investors, the sale to Apple is a huge win amid a bifurcated exit environment. At a reported $2 billion price tag, before any dilution, the deal would represent a return of more than 30x in a three-year period for Q.AI\u2019s seed investors, according to PitchBook data, which pegs the startup\u2019s most recent valuation at around $54 million.<\/p>\n Q.AI announced a $24.2 million seed round in early 2023 led by GV<\/a>, Samsung Next<\/a> and Exor<\/a>.<\/p>\n AI wearables have been a tricky category for investors, even as the rest of the industry has not lost any steam. Humane\u2019s AI pin device, which disappointed customers and the market, poured cold water on the sector. Intel<\/a> acquired Humane\u2019s assets at a major discount last year.<\/p>\n But the tide may be turning. OpenAI, which agreed to acquire ex-Apple design chief Jony Ive\u2019s wearable device upstart for $6.6 billion, says it will unveil its hardware product in the second half of 2026. And just last month, Meta<\/a> bought Limitless, an AI-powered pendant startup.<\/p>\n Recent News Ethos Technologies, backed by Sequoia and Accel, slips in Nasdaq debut<\/a> The insurance tech company was valued at $2.7 billion in 2021. 2 hours ago European PE holding periods fall for the first time since 2020<\/a> Energy experienced the largest improvement among sectors, decreasing by 39% from its 2024 peak. Today<\/p>\n