Apple is reportedly close to a deal with computer vision startup Prompt AI, beating out Elon Musk's xAI to secure talent and tech to be used in Apple Intelligence and HomeKit Secure Video.

While Apple is one of the big names in the field of consumer-oriented AI, it has the perception of falling far behind the rest of the pack. With issues such as Apple Intelligence's glacial rollout and a lack of a promised overhaul of Siri, it has to take action if it wants to seriously catch up.

One such action is to either purchase or acqui-hire from other companies, which CNBC says it is close to doing with Prompt AI. According to Friday's report, Apple is in very late-stage talks with the startup to secure new talent.

Prompt AI's leadership has allegedly held an all-hands meeting with the rest of the 11-person startup, explaining the deal. The purchase won't be for the company as a whole, but instead will be a grab for talent and the company's technology.

Employees who do not join Apple will apparently get a reduced salary and will be encouraged to try for other open roles at Apple. Investors, including those who took part in a $5 million seed round in 2023, "won't be made whole" by the sale, but will get some money.

Apple reportedly wasn't the only company interested in Prompt AI. Neuralink and Elon Musk's xAI have also supposedly considered negotiating their own deals.

Prompt AI's main product is Seemour, an AI-based tech that adds functionality to home security cameras. This includes adding person, pet, and object detection, as well as creating text descriptions for activity reports.

This at face value sounds close to HomeKit Secure Video, which can perform facial recognition with footage from some security cameras. However, given Apple's demand for iPhone-based AI services, such an acquisition would be better suited to that area of the company.

CEO Tete Xiao reportedly told employees that, though the technology and the app worked well, the business model behind it just wasn't doing well enough. The intention is to retire the app and to warn users that their data will be deleted.

While there's no guarantee that Apple will bring them aboard, there are two big names attached to the company. Xiao is a well-known AI researcher, while President Trevor Darrel founded the Berkeley Artificial Intelligence Research lab.

If the deal completes, it will be the latest for Apple as it works to maintain its AI projects.

In July, Apple was revealed to have picked up TrueMeeting in 2024. TrueMeeting's tech that lets users scan their faces with an iPhone to produce an AI avatar image, and probably was used to improve the Personas in Apple Vision Pro.

At around the same time, Apple bought WhyLabs, which worked to prevent hallucinations in large language models.

In May, four more acquisitions surfaced, including Mayday Labs in May 2024 to help bolster its Calendar functionality with AI.

The latest acqui-hire news arrives amid a battle between big-tech companies to poach AI employees from others. Major team members have been lured away by massive compensation packages to companies like Meta, to continue building up their AI services and technology.

While Apple is acquiring to fix its eroding AI team, it does so without going too big on its purchases.

In July, CEO Tim Cook confirmed Apple had acquired seven companies in the year to date. Though he insisted that none had been massively expensive, Cook added that Apple was still open to purchases that "accelerates our roadmap."

There's still the possibility of a massive purchase, despite executives having differing views on whether to keep acquiring or to be more cautious. There have been talks of Acquisitions of Mistral and Perplexity, moves that could cost Apple billions if it pulls the trigger.