Perplexity AI, a California-based competitor to ChatGPT, is reportedly set to raise $500 million, bringing its valuation to $8 billion. This would more than double its valuation from earlier this year, when it was valued at $3 billion after receiving investment from SoftBank. The company focuses on transforming knowledge discovery through an AI-native search engine.
Earlier this year, the company snapped $73.6 million in a Series B funding round at a valuation of $520 million from Jeff Bezos and others. This was followed by a $62.7 million funding round valuing it at $1.04 billion, making it a unicorn in the Gen AI sector.
The news about the upcoming investment in Perplexity AI comes on the heels of OpenAI’s $6.6 billion funding round at a $157 billion valuation.
AI-powered search engine
Perplexity AI was founded in 2022 by former Google researchers Arvind Srinivas (who worked at OpenAI), Dennis Yarats, Johnny Ho, and Andy Konwinski with engineering backgrounds in AI, distributed systems, search engines, and databases.
Unlike traditional search engines, Perplexity AI provides a chatbot-like interface that allows users to ask questions in natural language. It aims to compete against Google’s dominance in the search arena by using generative AI to answer queries. The platform’s AI responds with summaries containing source citations such as websites and articles, at which point users can ask follow-up questions to delve deeper into a particular topic.
Choice of LLMs for users
The company has a free version of its platform where users can find information using their default model. For more features, there’s a Pro version for $20/month. It lets them access Perplexity API credits for using advanced language models in projects, and get unlimited support for querying with Perplexity Copilot, the company’s interactive research assistant.
Perplexity uses the power of multiple large language models to deliver its results. It includes models developed in-house and external models such as Google’s Gemini, Mistral 7B, Anthropic PBC’s Claude, and OpenAI’s GPT-4. Pro subscribers can select their preferred model when making conversational search queries, allowing for a customised search experience.
As per the report, the company currently receives about 15 million queries a day, which accounts for an annualised revenue of around $50 million.
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