Perplexity AI, the AI-enabled search engine, is in talks to raise funds between $500 million and $1 billion, valuing the company at $18 billion, Reuters reported on Friday. This doubles Perplexity’s valuation, which stood at $9 billion in the previous funding round last December, after raising $500 million. Perplexity has been backed by NVIDIA, SoftBank Group, and Amazon founder Jeff Bezos.
This development signals a growing demand for AI-powered search engine tools and applications. While Perplexity faces competition from Google’s Gemini and OpenAI’s ChatGPT Search, even Anthropic has entered the game, announcing a web search feature in its Claude chatbot.
Besides primarily functioning as an AI-powered search tool, Perplexity also provides reasoning and deep research capabilities, among numerous other features.
The company also recently announced that it is developing an agentic web browser called Comet.
Last month, Perplexity also announced Sonar, its in-house AI model, which is now available to all Pro users. Subscribers can set it as their default model in settings, and it is said to perform on par with OpenAI’s GPT-4o.
Furthermore, Deutsche Telekom, the parent company of T-Mobile, has partnered with Perplexity AI to create a next-generation AI phone. Running on a custom Magenta AI operating system, it will feature Perplexity Assistant.
CEO Aravind Srinivas, in a recent podcast, said that as a company grows bigger, maintaining the same speed and agility becomes challenging. “It’s beginning to happen already a little bit. We’re not as fast as we used to be.”
“We do have staging, deployment testing, A/B testing—all that stuff’s happening, and that’s naturally slowing us down in getting things out to production widely,” he added. Perplexity AI reportedly boasts 15 million active users on its website and the app.
However, a recent research study highlighted the inaccuracies in AI search engines. The Tow Center for Digital Journalism – Columbia University, performed an evaluation of search tools from ChatGPT, Perplexity, Grok, DeepSeek Search, and Google’s Gemini. Ten articles from each of the 20 publishers were selected randomly, and direct excerpts were picked from those articles as input for the AI tool.
These tools were then asked to identify the article’s headline, original publisher, publication date, and URL. The study found that collectively, these search engines provided incorrect answers to more than 60% of queries. Notably, Perplexity answered 37% of queries incorrectly, while Grok 3 answered 94% of queries incorrectly.
