Perplexity AI, a startup launched in August 2022, is aspiring to compete with Google in the search engine sector. The company’s technology merges the capabilities of a chatbot and a traditional search engine, and its innovation is gaining investment from figures including Amazon founder, Jeff Bezos. In the first few months of 2024, Perplexity AI is expected to close a funding round that will nearly double its valuation, bringing it to an estimated total of $1 billion.
The CEO of Perplexity AI, Aravind Srinivas, announced in January that the company had secured $73.6 million in funding from a variety of sources including venture capitalists, corporations like Nvidia, angel investors, and notably, Bezos’s Bezos Expeditions Fund. This funding round placed the value of the company at an impressive $520 million.
According to Srinivas, Perplexity AI boasted 10 million monthly active users and handled over half a billion inquiries in 2023. This achievement earned the startup the commendation of Jonathan Cohen, VP of applied research at Nvidia, as this level of user engagement is a major milestone for consumer AI products.
Perplexity’s AI search engine offers real-time data and reveals the sources of its responses through footnotes. Despite providing free access to their search engine, the company garners revenue from a Pro version, available at $20 per month. Subscribers to the Pro version can make use of various large language models, including Claude 2.1 by Anthropic, GPT-4 by OpenAI, or Perplexity AI’s proprietary LLM.
According to Srinivas, Perplexity AI is the next step in the evolution of search technology and outclasses Google’s outmoded search engine. Even as Google attempts to incorporate AI into its search system, Srinivas claims that Google’s apathetic attitude towards rapid innovation and enhancing user experience is evident. Google’s primary revenue source is user clickthroughs, leading to ad views.
Srinivas is confident that AI chatbots, like Perplexity AI’s model, are a better solution for users’ online inquiries and provide a more efficient and user-friendly service. He envisions the obsolescence of the time-consuming browsing through SEO spam, sponsored links, and scrolling through several web pages in favor of a more streamlined information consumption and sharing process.
Even though Perplexity AI’s impending $1 billion valuation is a promising development, the startup faces an uphill battle against Google, backed by vast resources, AI expertise, and the support of parent company, Alphabet, valued at $1.7 trillion. Despite the steep competition, the growth and investor interest in Perplexity AI are optimistic indicators of the startup’s potential.
