Perplexity AI Secures $500 Million Funding, Triples Valuation Amid Fierce Competition
Funding Boom: Perplexity AI, backed by Amazon founder Jeff Bezos, has successfully raised $500 million led by Institutional Venture Partners. This funding has remarkably tripled its valuation to $9 billion, according to a report from the Financial Times.
Surging Growth: Based in San Francisco, Perplexity AI is experiencing impressive growth in 2024, averaging hundreds of millions of monthly queries from 15 million active users, predominantly located in the U.S. The company’s market share in AI search rose from 2.7% to 5.8% this year, as per data from FirstPageSage.
Perplexity is directly competing with major players like Alphabet Inc.’s GOOGL GOOG Google and Microsoft Corp.’s MSFT search services, alongside challenging OpenAI’s platforms.
OpenAI’s ChatGPT holds a dominant market share at 73.8%, followed by Google’s Gemini at 13.5%. Despite this, Perplexity AI’s rapid ascent has caught the attention of prominent investors.
OpenAI’s site leads the AI marketplace with 250.1 million visits, making it the 92nd most visited site globally and 139th in the U.S., according to Similarweb data. This highlights its strong market capture.
In contrast, Perplexity AI ranks 467th globally and 547th in the U.S. with 58.69 million visits. Users spend an average of six minutes on the platform and browse nearly four pages each time, signaling strong engagement.
Meanwhile, Google’s Gemini platform has lagged, sitting at 12,612th globally and 31,018th in the U.S. with only 989,992 total visits. High bounce rates suggest difficulties in keeping users engaged.
Monthly visit statistics reveal further contrasts, with OpenAI receiving 83.39 million visits, Perplexity AI at 19.56 million, and Gemini trailing at 329,997 visits. OpenAI continues to dominate the traffic numbers.
Perplexity AI has not responded to Benzinga’s request for comments regarding its recent developments.
Data from Similarweb indicates a significant increase in discussions comparing Perplexity and ChatGPT, particularly spiking in August.
Implications of New Funding: Past investors in Perplexity include NVIDIA Corp., the SoftBank Vision Fund 2, and renowned AI pioneer Yann LeCun, chief AI scientist at Meta Platforms Inc..
This newfound funding arrives at a time when competition in the AI search arena is escalating. OpenAI recently added web searching features to ChatGPT, while Anthropic’s Claude has upgraded its functions with a “computer use” feature.
Both Google and Microsoft have also integrated large language models into their search offerings for more interactive results.
Perplexity AI’s revenue strategy focuses on subscriptions, with yearly revenues growing dramatically from $5 million in January to $35 million by August. The company is now considering advertising partnerships with larger brands, which could disrupt the traditional search advertising strategies previously dominated by Google.
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Disclaimer:This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
