27. Perplexity
Built by alumni from OpenAI, Meta, and Quora, Perplexity AI is attempting to create the next generation of search engines by combining generative AI with the internet.
In April, it expanded into new territory through a deal with Motorola, allowing it to widen its user base. Its technology will be included in Motorola's "Moto AI" capabilities. While not the first AI-powered search engine to partner with smartphones, it now is in direct competition with Apple and OpenAI's Siri-ChatGPT integration which was announced in December 2024.
″Search shouldn't be about endless links and ads — it should give the user directly what they want, and we think the best way to do that is through an answer engine," Perplexity CEO Aravind Srinivas said at a New York launch event. "Your phone is now an answer machine, personal assistant and a research agent."
Instead of pulling up links, Perplexity is essentially a hybrid between a chatbot and a search engine. It offers answers sourced directly from the Web, which it summarizes using large language models (LLMs). The platform's signature feature is its commitment to citation-backed responses, which not only provides context but factual backing. By the end of 2024, Perplexity was answering 20 million questions a day, according to the company.
The company's freemium model allows public access, and last year it added advertising. Brand partners like Indeed and Whole Foods joined the program, and it also launched a Publisher Program with partners like TIME, The Independent, and Fortune. It also has a paid tier that gives faster responses, PDF interpretation, and features like image generation. Its Enterprise Pro customers lean towards the finance and tech sphere, but it also works with other companies including CMA CGM, Nvidia, and the Cleveland Cavaliers. The company pulls in about $100 million in annual recurring revenue, sources told CNBC.
In May, it linked up with PayPal for an AI chat-based shopping feature that allows for booking travel, buying products and securing concert tickets on Perplexity's chat interface, paying instantly with PayPal or Venmo.
It has also made some bold moves this year, entering a bid in January to merge with TikTok under a company called NewCo. The deal would combine Perplexity and TikTok U.S., and would allow for the U.S. government to own up to 50 percent of the new company contingent upon a future IPO. In March, it laid out its TikTok vision in a blog post.
Because Perplexity depends on external sources it, like many web-based generative AI services, it can easily be swayed by the bias of the content it finds. Misinformation, or SEO-tailoring, can easily be taken as fact without additional checks. Despite this, Perplexity is gaining traction. It's backed by prominent investors including New Enterprise Associates, SoftBank Vision Fund, Jeff Bezos and Daniel Gross, a former Apple executive whose own search engine startup was acquired by the device giant.
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