AI startup Perplexity has attracted $200 million in fresh investment, reaching a valuation of $20 billion, sources revealed to The Information on Wednesday.
The report indicates that Perplexity has now raised a total of $1 billion. In mid-July 2025, the company completed a $100 million funding round at a $18 billion valuation. Its annual recurring revenue (ARR) is nearing $200 million, up from $150 million reported just last month. Earlier coverage by Business Insider highlighted that the startup was gearing up for a new funding round, reflecting its consistent financial growth and widening market presence.
The startup presents itself as a direct challenger to Google. Led by Indian American Aravind Srinivas, Perplexity made headlines in August when it tabled an unsolicited all-cash offer of $34.5 billion for Alphabet’s Chrome browser, a huge bid exceeding its own valuation by a wide margin.
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The startup is said to be developing integrations with educational platforms and enterprise knowledge systems, positioning itself as a leading search solution for both work and personal use. Backed by Nvidia, Perplexity has rolled out an AI-powered browser named Comet, designed to carry out specific tasks for users. Through this offering, the company aims to challenge industry heavyweights and cement its position in the competitive AI technology space.
On the other hand, Perplexity has joined the growing list of AI firms facing legal action. Copyright holders, including Encyclopedia Britannica and Merriam-Webster, allege that the startup improperly used their content in its “answer engine” for online searches, as per Reuters.
In a lawsuit filed Wednesday in New York federal court, the companies claimed that Perplexity illegally copied their content and diverted web traffic to its AI-generated summaries, impacting their revenue. It is one of several major cases in which content owners are challenging tech companies for incorporating their work into AI systems without permission.
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Perplexity’s “answer engine” scours the internet for users and condenses the information it finds, offering an AI-driven alternative to conventional search engines like Google. According to the lawsuit, Perplexity’s system “free rides” on Britannica and Merriam-Webster’s work by summarizing their articles and redirecting traffic that would normally visit their sites.
In their complaint, Britannica and Merriam-Webster alleged that Perplexity infringed their copyrights by scraping their websites, copying articles, and reproducing content without authorization. They also claimed the startup violated their trademark rights by attributing AI-generated errors to their brands. The companies are seeking unspecified monetary damages and a court order preventing Perplexity from further misuse of their content.
Perplexity is also being sued by News Corp, including Dow Jones and the New York Post, over claims that it improperly used their articles in its search engine.
Perplexity’s rise to a $20 billion valuation underscores its rapid growth and ambitions to challenge tech giants, but the series of high-profile lawsuits now casts a shadow over its trajectory. As the company faces lawsuits from Britannica, Merriam-Webster, and News Corp for allegedly misusing their content, these legal challenges could determine how far AI startups can go in using others’ intellectual property while growing quickly.