Perplexity AI seeks $500 million funding at $14 billion valuation
- Perplexity AI is in late-stage discussions to obtain $500 million at a $14 billion valuation.
- The funding aims to bolster its market position against competitors like Google and OpenAI.
- This funding round reflects the company’s rapid growth within the AI market and increasing competition.
In the United States, Perplexity AI, an artificial intelligence search engine company, is currently in advanced discussions to secure $500 million in funding. This funding round is being led by Accel, a prominent venture capital firm based in Palo Alto. The valuation for this round is set at $14 billion, which represents a significant increase from its previous valuation of $9 billion in December. Earlier efforts indicated that Perplexity aimed for a total raise between $500 million to $1 billion, aiming for an $18 billion valuation during initial talks in March. The company has seen rapid growth since its inception, expanding from a valuation of $3 billion just in June 2024 to $9 billion by December, reflecting the booming interest in generative AI technologies. This surge can largely be attributed to the increasing demand for AI-driven search solutions following the release of OpenAI's ChatGPT in late 2022, which sparked a revolution in this sector. Perplexity AI has been keen on innovating within the AI landscape, with plans to introduce its AI agent web browser named Comet. However, the competition is intensifying in the AI search market, with several players launching similar products. Notably, in March, Anthropic introduced its own web search feature enabling its chatbot Claude to provide real-time search results. Furthermore, OpenAI has implemented a search feature in its ChatGPT chatbot, enhancing its competitive position against Perplexity. Google also entered this space with its AI Overviews in its search product, though it faced criticism for inaccuracies shortly after the launch. Perplexity AI's annual recurring revenue has been reported to be just under $100 million, indicating a growing but still developing revenue stream. With substantial funding required for growth, Perplexity is navigating through a rapidly evolving landscape filled with advancements and market entries from notable tech giants like Google and Microsoft. As the company prepares to finalize its current funding round, the implications for its future trajectory and its positioning within the competitive landscape of AI search engines will be closely watched by investors and industry analysts alike.