March 13th, 2024: Perplexity AI, a startup founded in August 2022, is on a mission to challenge Google’s dominance in the search engine market with its AI-powered platform that combines the functionality of a chatbot and a traditional search engine.
The company’s rapid growth and innovative approach have caught the attention of investors, including Amazon founder Jeff Bezos, who invested in Perplexity AI through his Bezos Expeditions Fund.
In January, Perplexity AI CEO Aravind Srinivas announced that the startup had raised $73.6 million in a funding round that included investments from venture capitalists, companies like Nvidia, and angel investors, in addition to Bezos’ investment.
The round valued the company at approximately $520 million. Just a few months later, Perplexity AI is finalizing a new funding deal that would see its valuation nearly double to around $1 billion, according to a report by the Wall Street Journal.
Srinivas shared in a blog post that Perplexity AI had attracted 10 million monthly active users and served over half a billion queries in 2023.
Jonathan Cohen, VP of applied research at Nvidia, praised the startup, stating that it is “one of the few consumer AI products to reach this major milestone of 10 million MAUs.”
Perplexity AI’s search engine offers real-time information and provides footnotes showing the sources of its answers.
The company generates revenue by offering a Pro version for $20 per month, which allows users to choose from various large language models, including OpenAI’s GPT-4, Anthropic’s Claude 2.1, or Perplexity’s own LLM.
Srinivas has been vocal about his belief that Google’s search engine is outdated and that Perplexity AI represents the future of online information access.
“Google is going to be viewed as something that’s legacy and old, and Perplexity will be viewed as something that’s the next generation and future,” he told Reuters in January.
Despite Google’s ongoing efforts to integrate AI into its search engine, testing it on millions of users, Srinivas believes that the tech giant lacks the incentive to move quickly and improve the product experience, as its core revenue comes from users clicking on links and viewing ads.
As people increasingly turn to AI chatbots for their online queries, Srinivas is confident that Perplexity AI’s approach will prove more efficient and user-friendly.
“The times of sifting through SEO spam, sponsored links, and multiple web pages will be replaced by a much more efficient way to consume and share information,” he wrote in the January announcement.
While Perplexity AI’s potential $1 billion valuation is impressive, the startup still faces a significant challenge in competing with Google, which has vast resources, AI talent, and a parent company, Alphabet, valued at $1.7 trillion. Nevertheless, Bezos’ investment and the rapid growth of Perplexity AI demonstrate
