AI-powered search engine Perplexity AI says monthly revenues and usage have increased sevenfold since the beginning of this year after the firm closed a $250 million round of funding. Its growth comes as search engine giant Google intensifies efforts to integrate AI into its systems as it seeks to stay ahead in the sector.
Perplexity’s chief business officer Dmitry Shevelenko told the Financial Times that the search engine answered about 250 million queries in July alone compared to about 500 million during the whole of last year.
Perplexity’s earnings maintain a growth trajectory
Perplexity AI was launched three months before the OpenAI’s ChatGPT November 2022 debut. The latest figures rank the search engine as one of the fastest-growing generative AI applications to arise after ChatGPT, despite the controversy over the start-up’s data-gathering techniques.
According to the Financial Times, the start-up started its 2024 with $5 million in annualized revenues. An insider cited by Financial Times, said that based on recent months’ figures, the company makes more than $35 million now.
Perplexity AI is now revolving its business model around advertising subscriptions as it gains recognition and gets closer to competition with Google, which is the leading search engine firm in the $300 billion search ads industry.
“Our users and team only think about one thing when it comes to Perplexity: a place you get your questions answered. Competition sharpens our focus even more.”
Shevelenko.
Perplexity recently closed a new $250 million investment from investors including SoftBank’s Vision Fund 2, which is helping it stay in the game and compete against rivals, according to sources familiar with the deal. This has lifted the company’s valuation to $3 billion from $1 billion.
Perplexity is turning to ad revenue
Perplexity has earned its revenues mainly from its consumer and enterprise subscriptions. The firm, however, recently announced it will introduce advertising on its platform by the end of next month. “Unlike OpenAI, we always knew our main monetization engine was going to be advertising,” said Shevelenko.
Shevelenko said the company will split a double-digit percentage of its revenues on every sponsored article with new publishers. So far it has agreements with Fortune, Time, and Der Spiegel along with others, according to Financial Times.
Despite establishing partnerships with publishers, Perplexity has previously been accused of plagiarism by media companies like Forbes and Wired. The publishers are accusing the search engine firm of reproducing stories without clear attribution.
The company has acknowledged the allegations and has made changes to its user interface to make citations more prominent.
Meanwhile, Perplexity also revealed that about 50 publishers had requested to join its revenue-sharing program, and the company, is hoping to include a pool of websites too.
The firm’s existing investors include Nvidia and Amazon founder Jeff Bezos in addition to other prominent people in the industry like OpenAI co-founder Andrej Karpathy and Meta’s chief AI scientist Yann LeCun.