Perplexity AI Eyes $9B Valuation in Latest Funding Round, Challenging Traditional Search Giants
In a significant development for the artificial intelligence sector, AI search startup Perplexity AI is finalizing a $500 million funding round that would value the company at $9 billion, according to sources familiar with the matter cited by The Wall Street Journal. The investment, led by San Francisco-based Institutional Venture Partners (IVP), marks a dramatic increase from the company’s $520 million valuation at the start of 2024.
The latest funding round, Perplexity’s fourth this year, comes as the startup continues to gain traction in the competitive search engine market dominated by tech giants like Google. The company’s AI-powered platform, which has garnered over 2 million app downloads, processes approximately 230 million search queries monthly, demonstrating significant user adoption.
Unlike traditional search engines that provide lists of links, Perplexity delivers conversational responses similar to OpenAI’s ChatGPT while maintaining real-time web search capabilities. The company has established a dual revenue stream through premium subscriptions and an enterprise version that allows businesses to search internal documents.
However, Perplexity’s rapid growth hasn’t been without controversy. The startup faces legal challenges from major media outlets, including a lawsuit from Dow Jones and a cease-and-desist letter from The New York Times, over allegations of content misuse. In response, Perplexity has introduced a publisher revenue-sharing program, attracting partnerships with notable media outlets such as Fortune, Time, and Der Spiegel.
“If three articles from one publisher were used in one answer, the partner would receive triple the revenue share,” explained Dmitry Shevelenko, Perplexity’s Chief Business Officer, in a recent interview.
The substantial investment comes at a time when the AI sector is seeing increased competition, with OpenAI recently launching enhanced search features for ChatGPT and traditional search engines bolstering their AI capabilities. With an estimated annual revenue of $50 million, Perplexity’s latest funding round positions it as one of the most valuable AI startups in an increasingly competitive landscape.
