Will Perplexity AI’s $9B Valuation and Funding Effort Lead the AI Race?

When Jeff Bezos backs your company, you know you're onto something big—or at least something loud. That’s the story of our hero, Perplexity AI, a daring AI search engine that's making waves, not just for its tech, but for its audacity to poke the tech giant Google right in the ribs. We’ve all come across Perplexity AI, and many in the finance, tax, and accounting sectors use it regularly for research and development. It’s a powerful tool that cuts down the time it takes to uncover new information, providing reliable sources at the blink of an eye—all thanks to Perplexity AI.

Now, with talks to more than double its valuation to around $9 billion, Perplexity AI is sending the finance world into a frenzy. But behind the glitter of that jaw-dropping number lies a narrative filled with eyebrow-raising controversies, a few legal showdowns, and a hefty dose of ambition. Let’s take a stroll down Perplexity AI’s slightly bumpy memory lane while we catch up on where it's headed next.

The Humble Beginnings of a Search Revolution

Perplexity AI didn’t just pop out of the blue with billionaire backing and grand plans to take over Google’s turf. Like any other hero it began as an underdog in a very noisy market filled with AI startups all clamouring for attention, each one claiming they’ve invented the next best thing since sliced (artificially-generated) bread. When Perplexity launched, it had one major goal: to change the way we interact with information online. 

Think of Perplexity AI as the lovechild of Siri and Google, but with a Ph.D. in sass. You ask it a question, and it fires back answers in a concise, conversational way. It was designed to give you direct answers, not pages upon pages of links you’ll never click on. Endless Google searches? No, thank you! Perplexity AI set out to save us all some time—and it succeeded. This is evident from the audience traction it has garnered.

 As the platform grew, it started to gain traction for providing clean, accurate answers, pulling data from a wide array of sources—some of which we’ll get into later because not everyone was thrilled about it.

The Master Ingredient 

Every startup has that "aha" moment, and for Perplexity AI, that moment came when Jeff Bezos, NVIDIA, Daniel Gross (Former head of AI at Y Combinator), and Databricks Ventures threw their hat—and, more importantly, their wallet—into the ring. With Bezos’s backing, Perplexity’s ambitions went from “let’s get noticed” to “let’s take on Google." And with more investment came more momentum. By mid-2024, Perplexity had raised three rounds of funding and pushed its valuation to $3 billion, thanks to a booming AI market and lots of hype. 

It wasn’t just Bezos who saw the potential in Perplexity. The generative AI revolution was picking up steam, and Perplexity positioned itself at the intersection of cutting-edge tech and practical use cases. It wasn’t just about answering questions—it was about changing the search experience altogether. 

The Not-So-Smooth Road: Plagiarism, Lawsuits, and Cease-and-Desist Drama

But no good startup story is without its hiccups, and Perplexity has had its fair share of them. When you’re building an AI search engine that pulls data from all over the web, people start to notice where you’re getting your content. And let’s just say, not everyone was thrilled with Perplexity’s approach. 

First came Forbes and Wired, who called out Perplexity for essentially scraping their content to generate answers without proper attribution. Yikes. Then the New York Times jumped into the fray, issuing a "cease and desist" notice, demanding that Perplexity stop using its content for generative AI purposes. It definitely was a good Time battling with the Times. 

Perplexity, for its part, denied any allegations of plagiarism, but being the PR-savvy company it is, decided to smooth things over by launching a revenue-sharing program for publishers. That’s right, ‘If you can't beat 'em, pay 'em’ The program was designed to help media organizations benefit financially when their content is used to train AI models—because hey, if your data’s going to be scraped, you might as well make a buck off it. 

But all this controversy didn’t seem to slow Perplexity’s roll. If anything, it made the company a bit more notorious in the AI space, and we all know there’s no such thing as bad press when you’re gunning for a $9 billion valuation. 

Gunning for Google

Now, back to the biggest elephant in the room: Google. Perplexity AI is making it no secret that it’s here to challenge the king of search. While Google has dominated the search engine game for decades, Perplexity’s approach represents a shift in how people are starting to interact with information. Google’s model is all about serving you a buffet of links. Perplexity is aiming to be your personal AI assistant, giving you exactly what you need without all the clutter. 

Will it dethrone Google? Unlikely. But it doesn’t need to. The goal isn’t necessarily to beat the search giant but to carve out a space where AI-powered search can thrive. After all, the internet is vast, and there’s plenty of room for both. As long as Perplexity can continue raising funds, attracting users, and—most importantly—keeping the lawyers at bay, they might just be onto something game-changing. 

From $500 Million to $9 Billion – How Did We Get Here? 

In January 2024, Perplexity AI was worth $500 million. Now, as of late October, it’s in talks to raise that number to a staggering $9 billion. You might be wondering, "How did this company multiply its worth faster than my crypto portfolio tanked in 2022?" 

Well, for starters, the AI boom has been hotter than a Tesla stock on good news. Investors have been pumping money into any company with "AI" in its name, and Perplexity was already one of the top contenders. The fact that they had a functional product, a star-studded investor list, and a bold plan to take on Google didn’t hurt either. Don't believe us? Take a look at below data:

The company is reportedly looking to raise $500 million in its next funding round, though those numbers are as fluid as the stock market on a Monday morning. If successful, Perplexity will leap into the $9 billion stratosphere, becoming one of the highest-valued AI startups around. Not bad for a company that was battling it out at $500 million just ten months ago. 

What’s Next for Perplexity AI? 

Looking ahead, Perplexity’s path is clear: raise that $500 million, hit that $9 billion valuation, and keep innovating in the generative AI space. But the challenges remain. They’ve got to keep proving their worth, not just to investors, but to users who are growing increasingly wary of data privacy, content scraping, and the ethics of AI in general. 

And then there’s the competition. With AI powerhouses like OpenAI and Google’s Bard breathing down its neck, Perplexity will have to stay nimble and continue to evolve its technology, or risk becoming a footnote in the AI gold rush. 

Final Thoughts 

Perplexity AI’s journey from a half-billion-dollar underdog to a potential $9 billion juggernaut is a masterclass in timing, tech, and a little bit of tenacity. With backing from big names like Jeff Bezos and a laser focus on disrupting search, the company is poised for greatness—or at least a pretty wild ride. 

For now, all eyes are on their next move: can they successfully raise the funds and cement their place as a Google rival, or will their controversies catch up with them? Either way, it’s safe to say Perplexity AI is keeping the finance world—and probably a few lawyers—on their toes. Stay tuned for more stories like this, and subscribe to our free weekly newsletter!