California-based startup, Perplexity AI, has made headlines today with its announcement of raising $73.6 million in a series B round of funding. The impressive investment comes from prominent firms such as IVP, NEA, Databricks, Nvidia, Bessemer Venture Partners, and Kindred Ventures. Notably, the list of backers also includes renowned tech visionaries like Jeff Bezos, Elad Gil, Nat Friedman, Tobi Lutke, and Guillermo Rauch. With a total funding amount of $100 million and an estimated valuation of over $500 million, Perplexity aims to expand its AI-driven search engine offering to compete against industry giants Google and Microsoft in the age of generative AI and large language models (LLM).
A Better AI-Native Search Experience
While Google and Microsoft have dominated the search engine space for years, Perplexity believes it can disrupt these giants by delivering an enhanced AI-native experience. The startup provides a cutting-edge knowledge search platform that combines web indexes with various AI models. This unique combination allows Perplexity to offer accurate answers to users’ questions in a conversational manner. Gone are the days of clicking on multiple links, comparing answers, or endlessly searching for information. Perplexity streamlines the user experience by eliminating irrelevant content, including ads and sponsored posts, and presenting only the necessary information.
Furthermore, Perplexity takes it a step further by allowing users to explore the details of the provided information. By surfing the most relevant sources and citations, users can gain a deeper understanding of the topic at hand. Aravind Srinivas, co-founder and CEO of Perplexity, expressed the company’s commitment to accuracy and transparency, stating, “In an era where misinformation and AI hallucinations are causing increasing concern, we’re built on the idea that accuracy and transparency are prerequisites to making AI-powered search ubiquitous. The times of sifting through SEO spam, sponsored links, and multiple web pages will be replaced by a much more efficient way to consume and share information, propelling our society into a new era of accelerated learning and research.”
Free & Pro Versions for Enhanced Search
Perplexity offers a free version of its platform, which allows users to search using the company’s default model. However, for those seeking more advanced capabilities, there is a Pro version available at a monthly cost of $20. The Pro version offers users the ability to choose their preferred model, including the highly anticipated GPT-4, for even better search results. Additionally, the paid tier includes access to Perplexity API credits, allowing integration of state-of-the-art open-source LLMs into projects, as well as unlimited querying support for Perplexity Copilot, the company’s interactive research assistant.
Srinivas emphasized the uniqueness of Copilot, stating, “Copilot tailors search queries with custom follow-up questions, introducing the concept of generative user interfaces. It removes the burden of prompt engineering and does not require users to ask perfectly phrased questions to get the answers they seek. This enables users to gain more relevant and comprehensive answers than other AI chatbots, traditional search engines, or research tools.”
Impressive Traction and Future Ambitions
Perplexity launched its search engine just one year ago but has already gained significant traction. With 10 million monthly active users and over a million mobile users, the platform has shown its appeal. In 2023 alone, the platform served over half a billion queries, with Copilot notably popular among academics, students, and knowledge workers. However, despite these achievements, Srinivas acknowledges that the company is still far from its ultimate mission of “serving the entire planet’s unbounded curiosity.”
Competing Against Industry Giants
Perplexity faces a formidable challenge in competing against Google and Microsoft, who boast billions of users and are already integrating generative AI into their search engines. Google Search is currently testing its Gemini model, which has significantly reduced response latency. Meanwhile, Microsoft Bing has tapped into OpenAI’s GPT-4 for information search and DALL-E 3 for image generation. However, both players continue to display links and ads in their results, a distinguishing factor from Perplexity’s approach. It will undoubtedly be fascinating to see how Perplexity leverages its efforts and unique features, such as model flexibility, to take on these industry behemoths and scale its operations in the age of AI.
