Nvidia (NVDA)-backed AI-driven search engine Perplexity AI is reportedly seeking to raise up to $1 billion, potentially valuing the startup at $18 billion. According to familiar sources, the funding aims to support Perplexity’s expansion and capitalize on the surging demand for its AI technology. Notably, Bloomberg was the first to report the funding talks.
Perplexity AI, founded in 2022, is a generative AI-powered search startup challenging Alphabet’s (GOOGL) Google and Microsoft (MSFT)-backed OpenAI by redefining online search. Along with Nvidia, the company has secured investments from Amazon’s (AMZN) Jeff Bezos and Japan’s SoftBank (SFTBY). The investors involved in the new funding round remain undisclosed.
Perplexity Eyes Double Valuation in Just Months
Perplexity AI’s valuation skyrocketed in 2024, rising from $3 billion in June 2024 to $9 billion by December, driven by the generative AI surge and strong investor interest. The latest round now doubles its valuation compared to the year-end figure. However, the discussions are in the early stages and the details could change.
Perplexity AI offers both free and paid versions of its search tool, along with additional services. According to Bloomberg, which cited a source familiar with the matter, Perplexity’s annual recurring revenue has now hit $100 million.
However, Perplexity faces increasing competition from OpenAI, which expanded its ChatGPT-powered search capabilities to all users late last year. In comparison, OpenAI’s Series E funding round on October 2, 2024, valued the company at $157 billion.
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