After its announcement of a strategic partnership with SoftBank in April 2024, Perplexity, the San Francisco-based AI search engine challenging Google, is leveraging this collaboration to broaden its user base and data touchpoints in Japan. Starting June 19, SoftBank, along with its mobile operations Y!mobile and LINEMO, will offer free one-year subscriptions to Perplexity’s premium service, Perplexity Pro.
Perplexity’s partnership with SoftBank signifies its global expansion ambitions and underscores the strategic importance of Japan in its growth strategy. By providing access to its premium tier through SoftBank’s vast mobile network, Perplexity aims to penetrate the Japanese market deeply. This move aligns with its broader goal of monetizing its services through the Perplexity Pro tier.
Key Benefits of Perplexity Pro Subscription:
- Advanced AI Capabilities: Users can select the latest large language models (LLMs) for enhanced search functionalities.
- High-Quality Image Generation: Access to tools that generate images based on search histories.
- Personalized Search Experience: AI profile feature that tailors search results and offers chat-based support.
- Pricing: Monthly and annual subscriptions available for web and iOS platforms.
Mobile carriers like SoftBank are increasingly interested in partnering with AI companies. They may lack the resources or inclination to develop in-house AI models but are keen to leverage AI’s burgeoning popularity to attract more users. Collaborations with AI startups provide carriers a way to integrate cutting-edge technologies into their services, potentially boosting customer acquisition and revenue.
SoftBank’s involvement with Perplexity is akin to early partnerships between mobile carriers and streaming services like Spotify. These deals helped expand the user base of premium services, demonstrating the value of strategic alliances in tech adoption.
Comparison of AI Integration Strategies:
| Company | AI Partnership | Impact on Market |
|---|---|---|
| SoftBank | Perplexity Pro Subscription | Expands AI services in Japan |
| Deutsche Telekom | Perplexity Partnership | Enhances AI capabilities in Germany |
| Spotify | Early Mobile Carrier Deals | Boosted premium user base |
Simultaneously with its SoftBank partnership, Perplexity also announced a collaboration with Germany’s Deutsche Telekom in April 2024. This dual approach highlights Perplexity’s strategy to build strong alliances with leading telecom providers to secure its position in the global market.
While the financial specifics of these partnerships remain undisclosed, SoftBank’s investment focus on AI is evident. The company has been actively exploring opportunities in the AI space through its Vision Fund, showing interest in AI startups like OpenAI and Mistral, although official investments are yet to materialize.
SoftBank’s founder and CEO, Masayoshi Son, has a visionary approach to AI, evidenced by his plans to establish a $100 billion AI chip venture. Additionally, SoftBank has been linked as a potential buyer for the U.K.-based AI hardware company Graphcore. These moves align with SoftBank’s overarching goal to become a dominant player in the AI industry.
Moreover, SoftBank’s Japanese division has launched its own large language model venture, SB Intuitions, focusing on the Japanese language. Despite the competitive landscape, where leading players are developing multilingual models, this initiative underscores SoftBank’s commitment to AI development tailored to its home market.
Perplexity’s financial trajectory has been impressive. In April 2024, the company secured $62.7 million in funding, doubling its valuation to $1 billion within three months. Current reports suggest Perplexity is raising an additional $250 million, potentially elevating its valuation to between $2.5 billion and $3 billion. This growth trajectory is supported by a roster of prestigious investors, including Bezos Expeditions, IVP, NEA, Sequoia, Nvidia, and Databricks, along with influential individual backers.
Perplexity’s Pro tier is designed to generate significant revenue by offering advanced search capabilities and personalized experiences. The subscription model includes various pricing options:
Perplexity Pro Pricing:
| Platform | Monthly Price | Annual Price |
|---|---|---|
| iOS | ¥3,000 | ¥30,000 |
| Web | $20 | $200 |
The premium tier’s features, such as the ability to select preferred LLMs and access high-quality image generation tools, cater to users seeking comprehensive AI-driven search and data processing capabilities.
Despite its rapid growth and innovative offerings, Perplexity faces challenges, particularly around content crediting. Publishers have criticized the startup for how it attributes work in its search results. Perplexity is addressing these concerns by exploring revenue-sharing agreements with content creators, aiming to create a more equitable ecosystem.
SoftBank’s spokesperson confirmed to TechCrunch that their strategic partnership with Perplexity does not involve direct investment. However, the collaboration opens potential avenues for further cooperation, especially in leveraging AI technologies for various applications.
Perplexity’s strategic partnerships with SoftBank and Deutsche Telekom mark significant milestones in its global expansion efforts. By offering free premium subscriptions through these telecom giants, Perplexity is poised to increase its user base and deepen its market penetration in Japan and Germany. As SoftBank continues to explore AI ventures and partnerships, its collaboration with Perplexity exemplifies how established corporations and innovative startups can synergize to advance AI adoption and create new business opportunities.
With its ongoing efforts to secure funding and refine its services, Perplexity is well-positioned to continue its trajectory as a formidable competitor in the AI search engine landscape. The future will reveal how these strategic partnerships and initiatives will shape the company’s growth and influence in the industry.
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Featured Image courtesy of ITPro