Perplexity AI has gained $73.6 million in funding from investors like Amazon founder Jeff Bezos, Nvidia, Institutional Venture Partners as well as personal investments from former YouTube CEO Susan Wojcicki and Google AI’s Jeff Dean.
According to a report by The Wall Street Journal, this is the largest sum raised by an internet search startup in recent years.
How Perplexity AI is different
Unlike Google’s AI-powered Search and Bard, and Microsoft’s Copilot that rely on a single large language model (LLM) to return best possible answers, Perplexity’s search tools are powered by a variety of LLMs – from OpenAI to Meta’s open-source model Llama – to generate information with sources and citations.
Aravind Srinivas, chief executive at Perplexity, said the startup’s advantage lies in its focus and ability to fine-tune a variety of top-performing AI models instead of locking into one.
“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,” said Srinivas.
He also said in a post on X that Jeff Bezos invested in Google in 1998, before it had any business model figured out, or was sky-rocketing in search traffic.
“His investment in Perplexity is symbolically significant. Times are changing. Search is changing. We are entering a new age,” he added.
The California-based startup claimed that it served more than 500 million queries in 2023. It plans to use the funding to hire and build more products. Reportedly, it has 38 people and plans to reach about 60 by the end of this year.
An uphill task for Perplexity AI
According to Similarweb data, the startup’s website and mobile web had 45 million visits in December. While it is growing at a fast pace, the company is not profitable and generates single-digit million revenue annually.
The online search market where Google enjoys about 90% market share is extremely competitive because a billion dollar company Microsoft has so far failed to wrest major market share away from Google despite spending billions and integrating AI into search engine Bing.