Perplexity AI is reportedly in discussions to raise $500 million in a new funding round, which could more than double its valuation to $8 billion or higher, according to sources familiar with the matter, as reported by the Wall Street Journal.
This comes just months after the artificial intelligence (AI) company achieved a $3 billion valuation in a previous funding round led by SoftBank. Jeff Bezos is one of the key backers of the company, and Nvidia also supports the AI-driven search engine. Perplexity currently generates an estimated $50 million in annualized revenue based on recent sales figures and processes around 15 million queries daily.
Perplexity operates as an AI-powered search tool that delivers instant answers to user questions, complete with sources and citations. The platform is powered by large language models (LLMs), including those from OpenAI and Meta’s open-source model, Llama, which allows it to summarize and generate information in a chatbot-style interface. However, the company has faced criticism from multiple media organizations, including Forbes and Wired, for allegedly plagiarizing their content without permission. To address some of these concerns, Perplexity launched a revenue-sharing program for publishers whose content is utilized by the platform.
Legal Issues and Publisher Concerns
The company has also been served with a cease-and-desist notice from The New York Times, which demands that Perplexity stop using the newspaper’s content for its AI-driven services. Despite these challenges, Perplexity CEO Aravind Srinivas has expressed his intent to work collaboratively with publishers, stating that the company does not aim to antagonize anyone. However, Perplexity declined to comment on the current fundraising talks.
These developments follow the recent success of OpenAI, which raised $6.6 billion in a funding round, securing a $157 billion valuation. With AI products like OpenAI’s ChatGPT continuing to blur the line between search engines and chatbots, Perplexity’s ambitions in the search market align with OpenAI’s efforts, especially as OpenAI introduces its own search product, SearchGPT.
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