Perplexity, the artificial intelligence-based search engine, has surged to a staggering $18 billion valuation, just two months after raising capital at a $14 billion price tag. The steep rise underscores the red-hot investor appetite for emerging AI players aiming to challenge Big Tech’s long-standing dominance in internet search.
Founded just three years ago, Perplexity has raised fresh funding five times over the past 18 months. Its valuation skyrocketed from about $500 million at the beginning of 2024 to $14 billion by May. Although the company initially faced investor resistance when it sought an $18 billion valuation in May, new backers approached after the round closed and secured equity at that level, according to sources familiar with the matter.
Challenging Google’s Dominance
Perplexity has positioned itself as a challenger to Google, not only with its AI-powered search engine but also by launching its own browser. Most recently, it introduced “Comet,” a new AI web browser exclusively for premium subscribers. Comet functions as an agent that executes voice and text commands — such as summarizing social media feeds, shopping online, and sending emails — on behalf of users.
CEO Aravind Srinivas envisions a future where AI models manage not just queries but full user interactions with context-aware intelligence. “The endgame is the browser and agents that not only do stuff but also pull all of the context in,” he told the Financial Times, earlier this year. Srinivas has reiterated his aim to take Perplexity public, despite being viewed as a takeover target by companies like Apple and Meta.
Revenue Growth and Big-Name Backers
Perplexity has seen its annualised revenues leap from $35 million in August 2023 to $150 million in recent months. The company earns primarily through subscription plans ranging from $20 to $200 a month, and has been a pioneer among chatbot developers in monetising via advertising and ecommerce.
Investors include heavyweight names like Nvidia, SoftBank’s Vision Fund 2, New Enterprise Associates, IVP, Amazon’s Jeff Bezos, and Meta’s Yann LeCun. Yet, despite the growth, Perplexity still faces stiff competition from AI leaders like OpenAI, Anthropic, and of course, Google — which commands billions of users worldwide.
As tech giants increasingly invest in AI, Perplexity’s sharp rise signals that the race to define the future of search is only just beginning.