The startup Perplexity AI, which developed an AI-based search engine, has increased its monthly revenue sevenfold in the last two quarters, with the number of monthly queries to the system growing to 250 million compared to 500 million queries for the entire year of 2023. The Perplexity search engine has become one of the fastest-growing generative AI applications since the launch of ChatGPT by OpenAI in November 2022, despite allegations from copyright holders of data collection violations.
Company from San Francisco, founded by former Google intern Aravind Srinivas just three months before the launch of ChatGPT, bases its namesake search engine on artificial intelligence that formulates real-time answers to user queries based on information from the internet. Perplexity did not develop its own model, opting instead to license a combination of AI systems from various providers, such as OpenAI and Google.
Initially, the Perplexity search engine used the licensed version of the Microsoft Bing index but later abandoned it in favor of its own index and ranking system. "We use signals from all types of search engines, but we have our own crawler and ranking system," claims Perplexity's business director Dmitry Shevelenko.
This year, the company managed to attract investments of $250 million, which tripled its estimated value from $1 billion in April to $3 billion today. Investors in Perplexity include Nvidia, Amazon founder Jeff Bezos, OpenAI co-founder Andrej Karpathy, and Meta's chief AI developer Yann LeCun. Yann LeCun.
The growth of the Perplexity startup comes against the backdrop of AI features being integrated into Google's search engine and the launch of OpenAI's SearchGPT prototype search AI tool. "In the end, a smaller player in this field has two advantages: speed and focus," believes Shevelenko. "Our users and team focus solely on one thing when it comes to Perplexity: the place where you get answers to your questions. Competition sharpens our attention even further."
At the beginning of the year, based on the extrapolation of sales from the last month, Perplexity's annual income was estimated at $5 million, but by now the revenue forecast has increased sevenfold to $35 million. The company has now begun transitioning from a subscription-based business model to generating profits from paid advertising. This brings Perplexity closer to more direct competition with Google, which dominates this $300 billion advertising industry.
The platform targets journalism and academic circles as sources of sufficiently reliable information and data. Perplexity sees this original material as its advantage over traditional search engines that index a much wider range of sites. Some analysts believe that the emergence of advertising could negatively impact user growth due to a 'unreliable environment' and skepticism about the impartiality of search results.
"For Perplexity to become a useful product on the open internet, there must be good business models for publishing new and updated facts about the world," says Shevelenko. "If you want to align incentives [with journalism] in the long run, revenue sharing is a more effective way to do this than one-time payments, which OpenAI pursued."
According to Shevelenko, the company will share a 'double-digit' percentage of its revenue with each partner news publisher. He mentioned that such agreements have already been made with Time, Der Spiegel, and Fortune, and in total, more than 50 publishers have expressed a desire to join the revenue-sharing program within two weeks of its launch.
It is worth noting that earlier, publications like Forbes and Wired accused Perplexity of violating intellectual property rights by 'reproducing stories without clear attribution and copying sites that explicitly blocked its search bots.' The company took this criticism into account—it made changes to the user interface to make citations more prominent and altered the format of aggregated responses.
Many experts believe that the AI-based search market is 'heating up'. They argue that traditional web search is becoming obsolete due to new ways of matching users with information, products, and services. The risk lies in whether these new methods will be reliable enough for mass usage. 'AI is stubbornly inclined to confabulation,' says analyst Joseph Teasdale. 'At the scale of billions of queries per day, serious failures are inevitable.'
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Source: 3dnews.ru
