Perplexity AI is in the talks to raise between $500 million and $1 billion in funding at an $18 billion post-funding valuation, according to a latest report by CNBC. This would double the AI search startup’s most recent valuation.
In December 2024, Perplexity had a valuation of $9 billion, triple its valuation from June 2024. Perplexity has just under $100 million in annual recurring revenue, or ARR, according to sources, who chose to remain anonymous due to the confidential nature of the talks.
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As of October 2024, Perplexity AI reported 15 million active users, reflecting a 50% increase from 10 million active users earlier in the year. Additionally, the platform touts approximately 50 million global visitors each month.
The AI search company competes directly with tech giants like Google and OpenAI. Launched in 2022, Perplexity started out in the midst of the generative AI boom and faces stiff competition to date.
Earlier on Thursday, Anthropic launched its web search product, allowing its chatbot Claude to display real-time search results to a subset of users. OpenAI launched a search feature for ChatGPT last fall, which positioned it to better compete with Perplexity, as well as leading search engines such as Google and Microsoft’s Bing.
Meanwhile, Perplexity, in February, announced Comet, an AI-powered browser. With “A Browser for Agentic Search by Perplexity,” Perplexity said it plans to “reinvent the browser.” Perplexity also announced a shopping assistant which includes the “snap to shop” option, allowing users to take pictures, upload it to the AI search engine, and find similar objects to buy.
Earlier, the startup was in talks for a TikTok merger as well as a Grok merger was hinted but both remain uncertain. Perplexity’s latest deal with SoftBank for expansion into Japan is the latest in the AI firm’s attempts towards global expansion. Perplexity has also partnered with South Korea’s SK Telecom, Germany’s Deutsche Telekom, France’s Bouygues Telecom to expand into South Korea, Germany, and France respectively.
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Perplexity claims that it sees a potential investing advantage when it comes to startups because roughly 80,000 developers are plugged into its network, according to CNBC’s source. That gives the startup visibility into who is using its application programming interface, or API, and who is most active in their consumption. Perplexity’s founders and investors are putting money into the fund, and some of the company’s commitment is in the form of stock, the source said.
However, the startup is not without its controversies. Like other AI chatbot-style models trained on published data, Perplexity has faced accusations of plagiarizing content from media outlets. In July 2024, the company debuted a revenue-sharing model where if a user asked a question and Perplexity generates ad revenue from citing an article in its answer, Perplexity will share a percentage of that revenue with the publisher.