Apple has paid almost $200m for an AI start up that specialises in bringing intelligence to “smart” devices, in one of the largest in a spate of acquisitions by the iPhone maker to make up for lost ground in a key technology. 

The company’s offer for Seattle-based Xnor beat out approaches from other big groups including Microsoft, Amazon and Intel, according to two people familiar with the purchase. 

The two-year-old start-up specialises in running complex machine learning models on so-called edge devices — the name given to the wide range of gadgets, from smartphones to smart home devices and cars, that operate beyond the reach of the cloud data centres that currently handle most artificial intelligence processing. 

Running machine learning on-device, rather than in the cloud, has become one of the most important technology frontiers in the spread of AI. For Apple, better on-device AI would allow the company’s customers to keep full control of their personal data, said one person familiar with Xnor’s technology. That has become an important part of the company’s marketing pitch as it tries to distinguish itself from Google and Facebook. 

The technology also reduces the network demands caused by AI and means that critical applications can continue to run even when they lose a connection to the cloud, such as in driverless cars. 

Xnor had developed a way to run large machine learning models without requiring the computing resources and power normally needed for such data-intensive work. Google has been working on a similar project of its own, called Coral. 

The first use of Xnor’s technology has been in “smart” security cameras, which use image recognition to detect when they see a person and can send an alert. Other applications under development include monitoring shelves in retail stores to help with inventory management.

Apple’s Siri voice service was based on one of its first AI acquisitions, though it has since fallen behind rival technology from Google and Amazon. 

The company has sucked up an increasing number of small AI companies in the two years since it hired John Giannandrea, a former heard of search and AI at Google, to give a boost to its own efforts in machine learning. Deals have included Drive.ai, an autonomous driving start-up.

The latest acquisition comes at a time when regulators are increasingly concerned about the ability of the biggest tech companies to use their huge wealth to dominate the next key technologies. However, most AI acquisitions by Apple and others have been too small to attract attention on their own. 

The purchase of Xnor builds on Apple’s growing presence in Seattle, which has emerged as an important centre in both the research and application of AI, thanks partly to the presence of Amazon and Microsoft. 

Three years ago Apple paid a reported $200m for another AI company based in the city, called Turi. That business has since become the foundation of Apple’s presence in the city. 

The company was spun out of the AI Institute founded by the late Microsoft co-founder Paul Allen, with $14m in financing from investors including local venture capital firm Madrona Partners. Xnor’s chief executive, Ali Farhadi, is also an associate professor at University of Washington.

Apple did not directly confirm the acquisition, but said that it “buys smaller technology companies from time to time”.