Apple Acquires AI Startup Q.ai in Second-Largest Acquisition Ever; iPhone Revenue Breaks Records
Apple made its second-largest acquisition ever, purchasing the AI audio startup Q.ai for $2 billion, according to a report by the Financial Times on Wednesday. The acquisition comes as Apple announced record-breaking iPhone revenue of $85.3 billion in its Q1 2026 earnings report, released Wednesday.
Q.ai, a four-year-old company, specializes in AI technology that uses facial expressions to understand "silent speech," according to The Verge. Apple's largest acquisition remains its $3 billion purchase of Beats in 2014. Apple did not disclose the terms of the Q.ai acquisition.
The company's Q1 2026 earnings report also revealed record-breaking total revenue of $143.8 billion, a 16 percent increase compared to the same period last year, according to The Verge. "The demand for iPhone was simply staggering, with revenue growing 23 percent year-over-year," The Verge reported. Emma Roth, a news writer for The Verge, noted that the iPhone had its "best-ever quarter."
These announcements come amid other significant developments in the tech world, including discussions between Elon Musk's SpaceX and xAI regarding a potential merger ahead of SpaceX's planned IPO later this year, Reuters reported. According to The Verge, the merger could help with SpaceX's plans to launch data centers into space. The specific timing and value of the potential merger remain unclear.
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