Highlights:

  • The discussions follow the AI industry leader OpenAI’s most recent investment round, which saw it raise USD 6.6 billion at a USD 157 billion valuation.
  • Perplexity has also stated that it intends to incorporate advertisements into its platform to increase the revenue.

An AI-powered search engine platform developer, Perplexity AI Inc., is discussing funding with investors to bolster its valuation to exceed USD eight billion.

Perplexity has closed three significant investment rounds in the past year, and as of this summer, its valuation is USD three billion, up from USD one billion in April and USD 520 million in January.

The company’s purported efforts to obtain further funding highlight how eager Silicon Valley investors are to invest in the newest AI ventures. The business is seeking to secure an extra USD 500 million in capital. However, the sum may vary, according to the sources familiar with the situation.

The discussions follow the AI industry leader OpenAI’s most recent investment round, which saw it raise USD 6.6 billion at a USD 157 billion valuation.

To offer an alternative to Google Search, Perplexity, which was formed two years ago and is supported, among others, by Jeff Bezos, the founder of Amazon.com Inc., SoftBank Group Corp., and Nvidia Corp., has developed an AI search engine and chatbot combination.

Perplexity’s AI engine scans the web for the most recent information, just like Google, but instead of returning a list of links, it will reply to user queries in a way that’s more like ChatGPT.

Although the startup’s tools are free to use, it generates revenue from the sale of premium subscriptions that unlock more capabilities. It has released an enterprise-grade version of its search engine specifically for corporations in addition to focusing on consumers. This version may also look for business-related information in an organization’s internal records.

Perplexity has also stated that it intends to incorporate advertisements into its platform to increase the revenue.

According to one of the persons familiar with the investment talks, Perplexity’s consumer-focused search engine normally processes approximately 15 million inquiries per day. Its annual revenue has increased from just USD ten million in March to over USD 50 million, according to the same source.

Like many AI firms, Perplexity has recently been the target of controversy after being accused by several online publishers of exploiting their content to produce its findings without their consent. For example, Perplexity was accused by Forbes of copying one of their paywalled articles in a search result. Even though Wired has set its robots.txt files to instruct search engine crawlers not to do this, the company has been accused by Wired of scraping content from websites, including its own.

As per reports, the New York Times recently issued a “cease and desist” notice to Perplexity asking to discontinue its content accessing.

In response to this criticism, Perplexity has extended a helping hand. It revealed a revenue-sharing scheme for publishers in July, promising a fixed payment to those who take part each time their work appears in search results that bring in money from advertisements.

In addition, Perplexity is providing participating publishers with access to its application programming interface, which allows them to include its search engine into their own webpages, and a complimentary one-year subscription to its commercial platform.

Aravind Srinivas, the CEO of Perplexity, stated at the time that the company was attempting to “align incentives” for all stakeholders in a scalable and sustainable manner and that he wished to stay away from any unfavorable relationships with news publishers.