Perplexity AI, the generative AI search engine start-up, is unfazed by the prospect of having to compete with behemoths like Google and Chat GPT.  “We are not surviving on Google’s lack of interest or competence in taking us on,” says the start-up’s Co-founder and CEO, Aravind Srinivas. He said this in response to a question as to what he thought would be the reaction of competitors like Google to the success of Perplexity.

“They (competitors like Google) cannot do it, because it is terrible for their business,” Srinivas told businessline on January 19. Srinivas, who did his B-Tech and M-Tech in Electrical Engineering at IIT Madras, was in his alma mater to deliver a lecture. He was referring to Google’s business model, which depends substantially on ad revenues, which would be affected if its Generative AI product, Google Bard, throws up sources of information. 

Google makes money “based on the links and how may people view the links and how many people click on the links”, Srinivas said, adding that “even though they have a new interface (Google Bard), they are not able to roll it out widely.” 

No ads

Answering a question, Srinivas said that Perplexity will not have ads. “We don’t have ads and we don’t intend to have ads at least for the foreseeable future,” he said, but also adding, “I’m not saying we will never do it.” He also stressed, “even if we do it (accept ads) we are not going to change the sanctity of this interface where people trust the answers we give.” 

10 million users

Perplexity today has 10 million monthly active users. The company has a subscription-based business model. “Subscribers get a bouquet of benefits like uploading files and images and access to our API,” Srinivas said. 

Perplexity AI is generating revenue, though it has not achieved profitability yet. Srinivas mentioned that, despite not being profitable, the company’s financial performance exceeded his expectations. Asked about the next steps he intends to take, he said, “We just need to keep making the product faster, more accurate and more delightful and keep getting more users. If we do this religiously over the next year, I think our outcome will be amazing.” 

Earlier this month, Perplexity AI raised $73.6 million in its latest round of funding, from Nvidia, Jeff Bezos, Bessemer Venture Partners and a group of other investors. The deal valued the company at $520 million.