As major search engines, namely Google, expand their platforms with next-gen ai technology, startups are looking to reinvent ai-powered search from the ground up. What could seem like a Sisyphean task, taking on competitors with ai/blog/how-many-people-use-google#:~:text=How%20Many%20People%20Use%20Google%20a%20Day%3F,2%20trillion%20global%20searches%20annually.”>billions and billions of users. But this new generation of search engines believes they can carve out a niche, no matter how small, by offering a superior experience.
One among the cohort, ai/”>ai Perplexityannounced this morning that it raised $70 million in a funding round led by Associate VP with additional investments from NEA, Databricks Ventures, former Twitter VP Elad Gil, Shopify CEO Tobi Lutke, former GitHub CEO Nat Friedman, and Vercel founder Guillermo Rauch. Other participants in the round were Nvidia and, in particular, Jeff Bezos.
Sources familiar with the matter tell TechCrunch that the round values Perplexity at $520 million post-money. That's a silly change in ai-funding-top-startups-investors/”>kingdom of ai generation startups. But considering Perplexity has only been around since August 2022, it's still an impressive rise.
Perplexity was founded by Aravind Srinivas, Denis Yarats, Johnny Ho and Andy Konwinski, engineers with experience in artificial intelligence, distributed systems, search engines and databases. Srinivas, CEO of Perplexity, previously worked at OpenAI, where he researched ai generation and language models along the lines of Stable Diffusion and DALL-E 3.
Unlike traditional search engines, Perplexity offers a chatbot-like interface that allows users to ask questions in natural language (e.g., “Do we burn calories while we sleep?”, “What is the least visited country?” , etc.). The platform's ai responds with a summary containing quotes from sources (mainly websites and articles), at which point users can ask follow-up questions to delve deeper into a particular topic.
Performing a search with Perplexity.
“With Perplexity, users can get instant answers to any question with complete sources and quotes included,” Srinivas said. “Perplexity is for anyone who uses technology to search for information.”
The foundation of the Perplexity platform is a series of generation ai models developed internally and by third parties. Subscribers to Perplexity's Pro plan ($20 per month) can upgrade models (Google's Gemini, Mistra 7Bl, Anthropic's Claude 2.1, and OpenAI's GPT-4 are currently in rotation) and unlock features like imaging; unlimited use of Perplexity Copilot, which considers personal preferences during searches; and file upload, which allows users to upload documents that include images and have models analyze the documents to formulate answers about them (for example, “Summarize pages 2 and 4”).
If the experience seems comparable to Google's Bard, Microsoft's Copilot, and ChatGPT, you're not wrong. Even Perplexity's chat forwarding UI is reminiscent of today's most popular generation ai tools.
Beyond the obvious competitors, search engine startup You.com offers similar ai-powered source summarization and citation tools, optionally powered by GPT-4.
Srinivas argues that Perplexity offers more robust search filtering and discovery options than most, for example allowing users to limit searches to academic articles or explore trending search topics submitted by other users on the platform. I am not convinced that they are so They differed in that they could not be replicated or, in fact, had not yet been replicated. But Perspective has ambitions that go beyond search. It is starting to offer its own generation ai models, which leverage Perplexity's search index and the public web for apparently improved performance, through an API available to Pro customers.
This journalist is skeptical about the longevity of generation ai search tools for several reasons, including that ai models are expensive to run. At one point, OpenAI was spending approximately $700,000 a day to meet the demand for ChatGPT. Microsoft is reported to losing Meanwhile, an average of $20 per user per month on their ai code generator.
Sources familiar with the matter say TechCrunch Perplexity's annual recurring revenue is between $5 million and $10 million right now. That seems pretty healthy… until you take into account the millions of dollars It is often difficult to train generation ai models like Perplexity's.
Image credits: ai Perplexity
Inevitably, concerns about misuse and misinformation around generation ai search tools like Perplexity also arise, as they should. After all, ai is not the best summarizer, sometimes key details are missingmisunderstanding and ai-product-reviews-seen-exaggerating-negative-feedback#:~:text=As%20is%20often%20true%20with,positive%20reviews%20to%20boost%20sales.”>exaggerating language or otherwise invent facts with great authority. And it's prone to spewing prejudice and toxicity, like Perplexity's own models. recently demonstrated.
Another potential obstacle in Perplexity's path to success is copyright. ai generation models “learn” from examples to craft essays, code, emails, articles, and more, and many vendors, including Perplexity, presumably search the web for millions or billions of these examples to add to their sets. of training data. Vendors argue that the fair use doctrine provides blanket protection for their web scraping practices, but artists, authors and other copyright holders disagree and have filed lawsuits seeking compensation.
As a tangential note, while a growing number of generation ai vendors offer policies that protect customers from intellectual property claims against them, Perplexity does not. According to the company ai/legal/terms-of-service”>Terms of ServiceCustomers agree to “hold harmless” Perplexity from claims, damages and liabilities arising from the use of its services, meaning that Perplexity is free from liability for legal fees.
Some plaintiffs, such as The New York Times, have argued that genetic ai search experiences divert content from publishers, readers, and advertising revenue through anticompetitive means. “Anti-competitive” or not, technology is certainly impacting traffic. A model of the Atlantic tech/ai/news-publishers-see-googles-ai-search-tool-as-a-traffic-destroying-nightmare-52154074″ target=”_blank” rel=”noopener” data-mrf-link=”https://www.wsj.com/tech/ai/news-publishers-see-googles-ai-search-tool-as-a-traffic-destroying-nightmare-52154074″>found that if a search engine like Google integrated ai into search, it would respond to a user's query 75% of the time without needing to click on your website. (Some vendors, such as OpenAI, have signed agreements with certain news publishers, but most, including Perplexity, have not.
Srinivas presents this as a feature, not a bug.
“(With Perplexity, there is) no need to click on different links, compare answers or endlessly search for information,” he said. “The era of sifting through SEO spam, sponsored links, and multiple sources will be replaced by a more efficient model of knowledge acquisition and sharing, propelling society into a new era of accelerated learning and research.”
The numerous uncertainties surrounding Perplexity's business model (and artificial intelligence generated and consumer search in general) do not seem to deter its investors. To date, the startup, which claims to have 10 million monthly active users, has raised more than $100 million, much of which goes toward expanding its 39-person team and creating new product functionality, Srinivas says.
“Perplexity is aggressively building a product capable of bringing the power of ai to billions,” Cack Wilhelm, general partner at IVP, added by email. “Aravind has the unique ability to maintain a long-term vision while relentlessly shipping products, requirements to address a problem as important and fundamental as search.”