Perplexity AI Seeks $500M at $9B Valuation in Fourth Funding Round This Year
AI search startup Perplexity is in discussions to raise approximately $500 million in new funding at a valuation of up to $9 billion, marking its fourth fundraising round of 2024 amid surging investor interest in artificial intelligence companies.
The potential deal would represent a dramatic surge in valuation for the Google search competitor, which was valued at just $520 million in January before climbing to $3 billion this summer following an investment from SoftBank’s Vision Fund 2. The latest talks emerged after investors approached the company rather than through an active fundraising effort, according to people familiar with the matter.
Perplexity has demonstrated strong growth metrics to support investor enthusiasm. The company’s annualized revenue has jumped from $5 million in January to approximately $50 million currently, while handling about 15 million daily queries. The platform leverages various large language models, including those from OpenAI and Meta’s Llama, to provide instant answers with sources and citations.
The fundraising discussions come during a period of intense investment activity in the AI sector. OpenAI recently secured $6.6 billion at a $157 billion valuation, while other AI ventures led by industry veterans have attracted significant capital. Former OpenAI co-founder Ilya Sutskever’s three-month-old startup, Safe Superintelligence, raised $1 billion in September.
However, Perplexity’s rapid expansion hasn’t been without controversy. The company has faced accusations of plagiarism from major news outlets, including a cease-and-desist letter from The New York Times. In response, CEO Aravind Srinivas has emphasized the company’s willingness to work with publishers and has implemented revenue-sharing partnerships with major media organizations.
The startup’s impressive roster of existing investors includes Amazon founder Jeff Bezos, Nvidia, and prominent AI figures such as OpenAI co-founder Andrej Karpathy and Meta’s chief AI scientist Yann LeCun. While discussions are still in early stages and terms could change, the potential deal underscores the continued appetite for AI investments despite growing concerns about a potential bubble in the sector.
