Perplexity AI is in early discussions to raise between $500 million and $1 billion in a new funding round that would value the artificial intelligence (AI)-powered search startup at $18 billion, according to multiple reports.
Market value of the San Francisco-based company, whose annual recurring revenue hovers around $100 million, has shot up in recent months. A new, 10-figure investment would double its current valuation of $9 billion. In April, Perplexity was valued at $2 billion.
Perplexity has been a major participant, and benefactor, in a generative AI boom that took off more than two years ago with the debut of OpenAI’s ChatGPT. It boasts some 80,000 developers, and it made a bid to merge with TikTok in January. In a blog post Friday, Perplexity proposed its plan to acquire and transform TikTok.
“Perplexity is singularly positioned to rebuild the TikTok algorithm without creating a monopoly, combining world-class technical capabilities with Little Tech independence,” the company wrote. “As a first step, Perplexity would immediately extend this capability to TikTok videos, making it easy for users to cross-reference information in real-time as they watch videos. We could develop the most powerful context system in the world.”
But it faces escalating competition in the AI search space and has stumbled through some controversies. After charges of plagiarizing content from media outlets, Perplexity came up with a revenue-sharing model for publishers last summer.
Rumors of a new funding round for Perplexity — as reported by CNBC and Bloomberg — come as one of its rivals, Anthropic, said it was adding web search to its AI assistant Claude. On Thursday, Anthropic said the new search capabilities essentially transform Claude from a tool limited by its training data cutoff to one that displays real-time search results to a subset of users.
Meanwhile, OpenAI added a search feature within ChatGPT last fall so it can better compete with Perplexity, as well as search engines from Alphabet Inc.’s Google and Microsoft Corp.
In March, Google introduced an early version of AI Mode, a chat-based AI search engine, for a limited group of testers.
