Perplexity AI Raises $73.6M, Valued at $520M in Bold Move Against Search Engine Giants

Mukund Kapoor
By Mukund Kapoor - Author 4 Min Read
4 Min Read

AI startup Perplexity AI challenges industry leaders with innovative search technology and significant funding boost.

In Short
  • Perplexity AI secures $73.6 million in funding, reaching a $520 million valuation.
  • The company introduces a unique AI-powered search engine with a chatbot-like interface.
  • Amidst challenges, Perplexity AI aims to revolutionize information search and retrieval.

January 7, 2024: In a striking development in the tech industry, Perplexity AI, an innovative AI-powered search engine, has successfully raised $73.6 million in a recent funding round.

This significant financial boost has propelled the company’s valuation to an impressive $520 million.


The funding round was led by IVP, with notable contributions from NEA, Databricks Ventures, and several influential tech leaders, including former Twitter VP Elad Gil, Shopify CEO Tobi Lutke, ex-GitHub CEO Nat Friedman, and Vercel founder Guillermo Rauch. Among the investors is Jeff Bezos, adding a high-profile endorsement to the startup.

Perplexity AI, founded by Aravind Srinivas, Denis Yarats, Johnny Ho, and Andy Konwinski, has been making waves since its inception in August 2022.

With their rich backgrounds in AI, distributed systems, search engines, and databases, the founders have brought together their expertise to challenge the conventional search engine model.

Srinivas, the CEO, brings his experience from OpenAI to the table, having worked on language and GenAI models like Stable Diffusion and DALL-E 3.

The startup distinguishes itself with a unique approach to searching. Unlike traditional search engines, Perplexity AI offers a conversational interface, allowing users to ask questions in natural language and receive summarized answers with source citations.

This innovative approach aims to simplify the search process, providing users with direct, authoritative answers to their queries.

Underlying Perplexity’s platform is a range of GenAI models developed in-house and by external partners.

The Pro plan, priced at $20 per month, allows subscribers to switch between various AI models, including Google’s Gemini, Mistra 7Bl, Anthropic’s Claude 2.1, and OpenAI’s GPT-4. This subscription also unlocks additional features such as image generation, unlimited use of Perplexity’s Copilot, and the ability to upload and analyze documents.

Despite its innovative approach and rapid growth, Perplexity AI faces challenges common to GenAI search tools, such as high operational costs, potential misuse, and issues of misinformation.

The company’s revenue is currently estimated between $5 million and $10 million annually, but the cost of training and maintaining GenAI models can be substantial.

Legal challenges loom regarding copyright concerns, as GenAI models often use web-scraped data for training. Perplexity claims protection under the fair use doctrine, like many others in the field, but artists and authors increasingly contest this stance.

Despite these challenges, Perplexity AI remains undeterred, aiming to revolutionize how people search and interact with information.

With over 10 million active monthly users and over $100 million raised to date, the company is focused on expanding its team and enhancing product functionality.

IVP General Partner Cack Wilhelm expressed confidence in Perplexity’s vision and leadership, highlighting the company’s fundamental potential to transform the search industry.

With its unique AI-powered platform and robust funding, Perplexity AI is poised to make a significant impact in the realm of online search and information retrieval.


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By Mukund Kapoor Author
Mukund Kapoor, the enthusiastic author and creator of GreatAIPrompts, is driven by his passion for all things AI. With a special knack for simplifying complex AI concepts, he's committed to helping readers of all levels - be it beginners or experts - navigate the intriguing world of artificial intelligence. Through GreatAIPrompts, Mukund ensures that readers always have access to the most recent and relevant AI news, tools, and insights. His dedication to quality, accuracy, and clarity is what sets his blog apart, making it a reliable go-to source for anyone interested in unlocking the potential of AI. For more information visit Author Bio.
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