Perplexity AI in fundraising talks to raise $500 million

The company is aiming to strengthen its position against industry giants like OpenAI and Google

Highlights:

• Perplexity AI is raising $500 million to increase its valuation to $8 billion.
• The company handles 15 million daily queries and generates $50 million yearly.
• Perplexity faces accusations of unauthorized web scraping and plagiarism from major media outlets.

Perplexity AI is in talks to raise around $500 million, the Wall Street Journal reports. The company is aiming to boost its valuation to $8 billion. This would more than double its June valuation of $3 billion. It was worth over $1 billion in April and $520 million in January.

In its recent funding round, the company raised $62.7 million from investors, including Nvidia and Garry Tan of Y Combinator.

Perplexity’s AI-based search engine works in a chatbot-style interface, where users can find information on the web. It handles about 15 million queries daily and generates approximately $50 million in revenue annually, per WSJ.

Competing with OpenAI

The company is trying to compete in the growing generative AI market dominated by companies like OpenAI, the creator of ChatGPT and SearchGPT. OpenAI recently raised $6.6 billion, bringing its valuation to $157 billion.

A recent study also found that SearchGPT is growing faster and generating more traffic for brands than Perplexity AI and Claude.

Launch of Perplexity’s ads program

Perplexity plans to launch an ads program for brands to target ads in specific categories. The company says advertisers can also place display ads next to answers from Perplexity AI.

Controversy with publisher

Media outlets, including the New York Times, have accused Perplexity of unauthorized web scraping and plagiarism. Publishers like Forbes and Wired have also accused Perplexity of plagiarizing their content.

In response, CEO Aravind Srinivas said he wants to collaborate with publishers. He said the company has “no interest in being anyone’s antagonist.” The company introduced a revenue-sharing program to address publishers’ concerns.

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