AI Start-Up Perplexity ‘Raising $500m’ On $14bn Valuation

AI start-up Perplexity is in advanced talks for a $500 million (£379.3m) funding round that would value it at $14bn, more than 50 percent up from late last year, the Wall Street Journal reported, citing people familiar with the matter.

The round, reportedly led by venture-capital firm Accel, shows ongoing investor enthusiasm for generative AI companies as they begin to challenge Google’s search dominance.

Last November Perplexity’s fourth funding round for the year reportedly valued it at $9bn round.

AI growth

A Reuters report in March said Perplexity was in talks to raise between $500m and $1bn at an $18bn valuation.

The Nvidia-backed company is one of a handful of start-ups that have grown quickly since the launch of ChatGPT more than two years ago.

It delivers search results using AI technology, returning results in the form of an AI-generated summary with links to its sources, rather than a list of results.

The technology is similar to Google’s own Gemini AI technology, which it uses to create AI-generated summaries at the top of search results in a feature called AI Overviews, launched last May.

Perplexity is planning to launch its own web browser called Comet in another challenge to incumbent technologies such as Google’s Chrome or Apple’s Safari.

It is one of multiple AI firms that have been challenged by news publishers for using their content without permission.

Search challenge

Apple executive Eddie Cue, speaking during the remedy phase of Google’s search antitrust trial last week, said Google searches in the Safari browser fell over the past two months for the first time in more than 20 years.

Cue attributed the shift to more people using AI technologies such as ChatGPT and Perplexity.

He said Apple held talks with Perplexity, OpenAI and Anthropic about adding AI search features to Safari.

Google’s share price dropped more than 7 percent after reports of the remarks.

OpenAI has added search features to ChatGPT and recently rolled out the features to all of its users.