Perplexity AI, the search engine powered entirely by artificial intelligence (AI), has just raised $500 million. This is its fourth funding round in 2024, bringing its valuation to $9 billion.
Taking on online advertising
As usual when it comes to artificial intelligence, a lot of people participated in this new fundraising: the venture capital giants Venture Partners, B Capital, T Rowe Price and New Enterprise Associates as well as a certain Nvidia. Perplexity saw its valuation explode during the yeargoing from 1 billion dollars in April to 3 billion in June after an investment from SoftBank.
Founded in 2022, Perplexity AI is a search engine powered by generative AI. The platform consults the web in real time to collect information, then summarizes it in clear and concise answers. It provides citations and links to the original sources, as well as a conversational interface for follow-up questions and in-depth exploration of certain topics.
With these new funds, it plans to tackle an extremely coveted area and, above all, totally dominated by Google: advertising in online search. The objective is to allow advertisers to make offers for a sponsored link to be placed in search results.
But the competition will be tough. In addition to giants like Microsoft or Google, OpenAI has also entered the search engine sector with SearchGPT. More generally, AI is revolutionizing online search, with traditional platforms also integrating the technology.
Purchase of Carbon
This inclusion in online advertising makes sense. Currently, Perplexity monetizes its platform using subscriptions to access better features, but this is clearly not enough. It projects $35 million in annualized revenue, well short of what is needed to offset the astronomical spending on AI.
This is also a recurring problem in the sector: startups raise astronomical sums while they struggle to achieve profitability, hence the fears of a major speculative bubble. The objective for these young shoots is to optimize their expenses and above all, to develop truly revolutionary applications.
With this in mind, Perplexity announces the acquisition of Carbon, a small startup specializing in connecting AI systems to external data sources. According to CEO Aravind Srinivas, this will allow AI to search directly in users’ work files and messages, including Notion, Google Docs, Slack and other business applications. Enough to diversify the search engine’s offering a little more.
- Perplexity AI completed its fourth fundraising of the year.
- The startup raised $500 million, bringing its valuation to $9 billion.
- With these funds, it intends to tackle the field of online advertising.
