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Perplexity Valued at $1 Billion as It Challenges Google Search

funding

Perplexity has reportedly raised $63 million as it aims to compete with Google’s search engine.

The new funding round values the artificial intelligence (AI) startup at $1 billion, marking a two-fold jump in valuation so far this year, Bloomberg News reported Tuesday (April 23).

As the report notes, the not yet 2-year-old company offers an AI chatbot that summarizes search results, offers citations for its answers and helps users hone their queries for the best responses. Fans include Nvidia CEO Jensen Huang, who has said he uses the product “almost every day,” with Perplexity processing more user queries in the US so far this year — nearly 75 million — than it did in all of last year.

“We want to get Perplexity in the hands of every single company in the United States,” Aravind Srinivas, the company’s co-founder and CEO, told Bloomberg.

According to the report, Perplexity is rolling out an enterprise version of its chatbot, priced at $40 a month, with new features such as stronger security and data protection measures. The company has also begun exploring expansion into new regions, signing distribution partnerships with Japan’s SoftBank Corp. and Germany’s Deutsche Telekom.

PYMNTS wrote about Perplexity in January after the company was valued at $520 million following a funding round that included participation from investors such as Jeff Bezos. And even though the company aims to compete with Google, Susan Wojcicki, the former YouTube CEO, and Jeff Dean, Alphabet’s chief scientist focusing on AI and an early member of Google Brain, have both invested in the startup.

As noted here, when OpenAI first came onto the scene with its buzzy ChatGPT platform, a “panicked” Google scrambled to rebuild its search product.

“That’s because we increasingly stand at an inflection point of a massive behavioral shift in how people access information online — and platforms built by Perplexity, Google and many other tech companies both large and small are all looking to capitalize on it,” PYMNTS wrote.

Meanwhile, PYMNTS examined that shift in behavior during a recent interview with Emily Heintz, founder and chief curator at Sèchey, a retailer that specializes in nonalcoholic beverages.

She said to get customers to engage with its eCommerce site the way they might with its brick-and-mortar locations, the company needed to be able to educate its shoppers about its products digitally.

“We use AI to make recommendations of products, and then we have a glossary of terms, so that just like when you walk into the store and someone asks us about a functional ingredient, or like, what is the alkalized wine, we can have that same experience online,” Heintz said.