In Silicon Valley, a new AI sensation named Perplexity has emerged, catching the attention of industry players such as Meta and Apple who have expressed interest in acquiring it discreetly. With a recent valuation of $14 billion post a funding round in May, this startup is being hailed as a groundbreaking challenger to Google Search’s dominance.
Despite mainly summarizing web results and providing links, Perplexity is dubbed an “answer engine” that leverages sophisticated language models to deliver human-like summaries along with references when posed with questions. It operates akin to ChatGPT but includes citations. Users can seek insights on topics like the French Revolution or the Genius Act and swiftly receive a paragraph with links to various sources like Wikipedia or news platforms.
The allure lies in its promise of a refined search experience devoid of advertisements, driven by chatbots. Critics argue that beneath its sleek facade lies minimal proprietary technology and heavy reliance on Google and OpenAI’s APIs. While it presents itself as fast, clean, and stylish, detractors claim it essentially reorganizes existing internet content.
Nonetheless, the buzz around Perplexity persists. In May 2025, the San Francisco-based company secured an additional $500 million in funding, elevating its value to $14 billion from $9 billion in December 2024. Backed by notable supporters like Jeff Bezos through the Jeff Bezos Family Fund and Nvidia, the company has attracted interest from tech titans like Apple and Meta for potential acquisitions.
The momentum behind Perplexity stems from its rapid growth trajectory and its emergence as a formidable rival to Google, especially among tech influencers and elite users. The platform has witnessed a surge in traffic recently and now offers various features including a Chrome extension, mobile application, and a Pro version enabling access to advanced AI models such as GPT-4 and Claude.
Nevertheless, there remains ambiguity surrounding what exactly justifies Perplexity’s lofty $14 billion valuation beyond riding the artificial intelligence wave. Skeptics view its ascent as emblematic of hype overshadowing substance – lacking in original model training or infrastructural innovation while merely presenting an appealing interface for querying AI-generated summaries sourced from public websites.
Concerns are also mounting regarding Perplexity’s information acquisition methods. Several media outlets like The New York Times, Forbes, and Wired have accused the platform of content scraping without proper authorization or attribution. Journalists and publishers caution that such AI-driven search experiences could cannibalize news traffic while offering little benefit to content creators.
The BBC recently joined the fray by threatening legal action against Perplexity AI for allegedly using BBC content without permission to train their default AI model. CEO Aravind Srinivas has defended the company as an “information aggregator” and introduced a revenue-sharing initiative in response to criticism in July 2024 with an aim to create a win-win scenario for all internet stakeholders.
The crux of the matter is clear – search equates to revenue. Google raked in $50.7 billion from search ads in Q1 alone, signaling significant potential gains for competitors like Perplexity if they manage to entice users away from established platforms and monetize their experience effectively. With Apple and Meta increasingly cautious about depending on Google’s ecosystem, Perplexity emerges as a promising contender in the AI-driven search landscape.
However, the implications extend further – whoever dominates the next generation search interface wields influence over user behavior. Just as Google supplanted Yahoo in the past, Perplexity stands poised to challenge Google’s supremacy. This explains why major tech players are eyeing Perplexity eagerly despite uncertainties surrounding what exactly they are investing in.