In full swing, Perplexity AI signs its fourth fundraising of the year

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Perplexity AI, the search engine powered entirely by artificial intelligence (AI), has just raised $500 million. This is its fourth funding round in 2024, bringing its valuation to $9 billion.

Taking on the online advertising challenge

As usual when it comes to artificial intelligence, some big names participated in this new round: venture capital giants Venture Partners, B Capital, T Rowe Price and New Enterprise Associates as well as a certain Nvidia. Perplexity has thus seen its valuation explode during the year, going from 1 billion dollars in April, to 3 billion in June after an investment from SoftBank.

Founded in 2022, Perplexity AI is a search engine that relies on generative AI. The platform searches the web in real time to gather information, then summarizes it into clear and concise answers. It provides citations and links to the original sources, as well as a conversational interface for follow-up questions and deeper exploration of certain topics.

With this new funding, it plans to tackle a highly coveted and, above all, totally dominated area by Google: advertising in online search. The goal is to allow advertisers to bid for a sponsored link to be placed in search results.

But the competition is going to be tough. In addition to giants like Microsoft and Google, OpenAI has also launched into the search engine sector with SearchGPT. More generally, AI is disrupting online search, with traditional platforms also integrating the technology.

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Carbon buyout

This insertion into online advertising makes sense. Currently, Perplexity monetizes its platform using subscriptions to access better features, but it is clearly not enough. It projects $35 million in annualized revenue, well below what is needed to compensate for the astronomical spending on AI.

This is also a recurring problem in the sector: startups raise astronomical sums while they struggle to achieve profitability, hence the fears of a major speculative bubble. The goal for these young shoots is to optimize their expenses and, above all, to develop truly revolutionary applications.

With this in mind, Perplexity announces the acquisition of Carbon, a small startup specializing in connecting AI systems to external data sources. According to CEO Aravind Srinivas, this will enable AI to search directly within users' work files and messages, including in Notion, Google Docs, Slack and other enterprise apps. Enough to diversify the search engine's offering a little more.

• Perplexity AI has completed its fourth fundraising round of the year.
• The startup has raised $500 million, bringing its valuation to $9 billion.
• With these funds, it plans to tackle the field of online advertising.

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