Japanese tech giant SoftBank Group Corp’s Vision Fund 2 is set to invest between $10 million and $20 million in U.S.-based search startup Perplexity AI, Bloomberg reported on Thursday.
The investment marks Masayoshi Son’s latest strategic move in a sector he believes is essential for cementing his legacy. Sources told Bloomberg that the investment will be part of a larger $250 million funding round. However, the deal is not yet finalized, and terms could still change.
The news of this funding comes just two months after initial reports indicated that Perplexity AI was planning to raise at least $250 million at a valuation between $2.5 billion and $3 billion.
In January, we covered Perplexity AI after it raised $73.6 million in Series B funding, valuing the company at $520 million. That round saw participation from high-profile investors, including U.S. chip designer Nvidia and Amazon founder Jeff Bezos through his Bezos Expeditions Fund.
“SoftBank will invest between $10 million and $20 million in the firm, which aims to use AI to compete with Alphabet Inc.’s Google search, according to people familiar with the matter. It’s investing as part of a larger $250 million funding round that triples Perplexity’s valuation and makes it one of the industry’s most highly valued companies,” Bloomberg reported.
Perplexity AI’s search tools are designed to provide instant answers to user queries, complete with sources and citations, leveraging a variety of large language models such as those from OpenAI and Meta’s open-source Llama. Since launching its conversational answer engine a year ago, the company has grown its user base to 10 million monthly active users and answered over half a billion queries in 2023 alone.
The startup is part of a burgeoning wave of generative AI companies capitalizing on the substantial influx of capital into the AI sector. Perplexity AI aims to challenge Google’s dominance in the online search market, and its investor base notably includes several former Google AI researchers.
Based in San Francisco, Perplexity AI has positioned itself as a competitor to OpenAI’s ChatGPT and Google’s Bard. Recent reports indicate that the startup is generating $3 million in annual recurring revenue as of this month.
Unlike traditional search engines like Google and Bing, Perplexity AI offers a novel search model allowing users to input straightforward queries, such as “Why can’t we digest grass?” and receive concise, AI-generated answers. Coinciding with its funding round, the company also launched an iOS app on Tuesday to cater to its predominantly mobile user base.
Founded in 2022 by Aravind Srinivas, Andy Konwinski, Denis Yarats, and Johnny Ho, Perplexity AI leverages large language models, particularly those developed by OpenAI, to understand and generate human-like text, making it a standout in the competitive field of generative AI.
Perplexity CEO
