Perplexity relates to the rising number of firms attempting to utilise artificial intelligence to break Google’s stranglehold on internet search. A surprising number of Google’s own AI experts are among its investors.
The latest deal in the expanding AI industry saw Perplexity AI, a company that creates a conversational search engine using AI, acquire $25.6 million in a fundraising round headed by New Enterprise Associates.
Perplexity is one of a rising number of firms working to weaken Google’s grip on internet search through the use of artificial intelligence. A surprising number of Google’s own AI experts are among its investors.
The San Francisco-based business proposes a new search methodology. Visitors enter basic questions on its website, such as “Why can’t we digest grass?” and Perplexity responds with brief responses provided by its AI algorithms. Together with the fundraising round, the business launched an iOS app on Tuesday, after discovering that mobile devices account for the bulk of its traffic.
The startup has swiftly gained a following and garnered a star-studded list of investors, including Yann LeCun, Meta Platforms Inc.’s top AI scientist. According to data from research firm PitchBook, its supporters also include at least six current and former AI researchers at Google and sister company DeepMind, including Jeff Dean, Google’s senior vice president for research and AI, who was an angel investor in the business in its early stages.
The disproportionate number of Google employees among the startup’s investors reflects Google’s pervasiveness in the emerging area of artificial intelligence — and how the company’s fundamental work in the subject frequently spills over beyond its Mountain View, California headquarters.
Those investing in new chat interfaces such as Perplexity and ChatGPT, OpenAI’s enormously popular chatbot, are hoping that the new tools will eventually divert people away from Google’s main search offering. Alphabet Inc.’s Google is attempting to move quicker in the field of artificial intelligence, with management declaring a “code red” immediately after the introduction of ChatGPT. Yet, many of its competitors in the area are employed and, in the case of Perplexity, financed by researchers who have left its AI laboratories.
In comparison to other AI businesses that have announced fresh investment rounds in recent weeks, Perplexity’s round is quite small. Character. AI, which was also formed by former Google employees, recently received $150 million. Another AI business, Adept, announced a $350 million funding round led by Spark Capital and General Catalyst.
Srinivas stated that he raised a lower round because the firm did not require large sums of money. “It’s in our best interests to be lean and inexpensive while maintaining the same execution pace,” he added.
As part of the funding agreement, Peter Sonsini, a general partner at NEA, joined Perplexity’s board. He believes that too huge rounds might be distracting for businesses. “They go on these vanity rounds,” Sonsini explained. We’ve all seen in recent years how raising too much money before you need it can go horribly wrong.
Perplexity’s traffic is still a tiny fraction of Google’s, but it is growing. According to digital intelligence firm Similarweb, the company’s website had roughly 13 million visitors in February, more than double the previous month’s figure. According to Similarweb, startups such as Character.AI and You.com have seen their traffic jump in recent months, demonstrating how the explosion of interest in ChatGPT has buoyed lesser companies.
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