Amid a surge in AI startup valuations and revenues, concerns are mounting over whether tech giants like Google will eventually dominate the space. For Perplexity CEO Aravind Srinivas, these questions are nothing new.
Perplexity, an AI-powered search startup recently valued at $9 billion, has found itself at the center of online skepticism, particularly as Google ramps up its AI initiatives. During a recent Reddit AMA, Srinivas faced repeated questions about whether Google could render his company irrelevant with the release of its new Gemini 2.5 models and a growing suite of AI-enhanced search features.
“They’ve had two years to kill Perplexity and haven’t,” Srinivas said. He argued that Google’s dependence on advertising revenue is a structural hurdle in its adoption of full-scale AI-generated responses. An Analytics India Mag report explained that the traditional search results encourage users to click on links, generating ad revenue. In contrast, AI-driven answers often present information directly, bypassing the need for users to visit other sites.
“Think about it: if AI gave you direct answers to the score in a basketball game, how can you sell Ticketmaster ads?” Srinivas said.
Alphabet, Google’s parent company, reported $72.46 billion in ad revenue in the fourth quarter of 2023. Srinivas believes this reliance will limit Google’s willingness to fully transition to AI-first search.