Perplexity AI's Revenue, Usage Skyrocket As It Enters Into Advertising

Perplexity AI’s revenue and usage has grown 700% since the start of the year after the artificial-intelligence tech startup closed a new $250 million round of funding.

The AI-powered search engine said it answered about 250 million questions in the last month, up from 500 million queries for all of last year, the Financial Times reported.

San Francisco-based Perplexity, which was founded by former Google intern Aravind Srinivas, uses AI software to answer questions by taking information from the Internet in “real time,” the company said.

The company, which saw annualized revenue grow from $5 million to $35 million since the beginning of the year, is changing its business model from subscriptions to advertising to compete with search ads giant Google, which is owned by Alphabet Inc. GOOG GOOGL.

Read Also: Jeff Bezos-Backed Perplexity CEO Criticizes Google’s Ad-Heavy Model: ‘It Ended Up Going The Same Path As Yahoo’

Perplexity investors include AI chipmaker Nvidia Corporation NVDA, Amazon founder Jeff Bezos, OpenAI co-founder Andrej Karpathy and Meta Platform Inc.'s chief AI scientist Yann LeCun.

Perplexity's revenue has come mostly from consumer and enterprise subscriptions, but it recently said it would bring advertising on to its platform by the end of September.

It will split a "double-digit" percentage of its revenues on every sponsored article with cited news publishers that include Time, Der Spiegel and Fortune, chief business officer Dmitry Shevelenko told FT.

Forbes and Wired accused Perplexity of plagiarism in June, saying the AI startup reproduced stories without clear attribution and scraped websites that had explicitly blocked its crawlers.

Shevelenko acknowledged the allegations and said the company has modified its user interface to make citations more prominent and ensure its responses do not summarize any websites, according to FT.

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Image created using artificial intelligence via Midjourney.