The launch of Perplexity AI’s search engine, known as “ask,” in August 2022 seemed to many an unlikely contender against Google (NASDAQ:GOOGL)’s dominance in the search industry. However, the landscape is shifting as Perplexity AI draws more users and secures significant funding. This development reflects broader trends in the tech world, where innovation and financial backing can help disrupt established markets.
Perplexity AI, despite being in its early stages, has shown impressive growth. The recent $250 million funding round has allowed the company to ramp up its operations significantly, resulting in a seven-fold increase in both monthly revenues and user engagement. By contrast, Google, which holds about 85% of the U.S. search market share, has been facing legal challenges over its business practices, potentially opening the door for competitors like Perplexity AI.
Funding Boost and User Growth
The influx of $250 million in new funding has been pivotal for Perplexity AI. Dmitry Shevelenko, the company’s chief business officer, noted that the number of searches through their platform has reached 250 million so far this year, a significant rise from the 500 million searches recorded in all of 2023.
Perplexity AI, an artificial intelligence search start-up, has increased its monthly revenues and usage seven-fold since the start of the year, after closing a new $250mn round of funding.
This substantial growth highlights the increasing interest in alternative search engines that offer AI-powered answers, appealing to users looking for more advanced search capabilities. Additionally, Google’s ongoing legal issues regarding antitrust violations present a timely opportunity for Perplexity AI to attract users who are exploring other options.
Google’s Legal Troubles
A federal court recently ruled that Google has acted as a monopolist to maintain its dominance. This ruling comes as part of broader scrutiny by the U.S. Department of Justice into Google’s business practices, including payments to Apple (NASDAQ:AAPL) to be the default search engine on the Safari browser.
Google is a monopolist, and it has acted as one to maintain its monopoly.
These legal challenges could create an environment where users are more willing to experiment with new search engines like Perplexity AI. Still, the ultimate test for Perplexity AI will be whether it can deliver a user experience that matches or surpasses Google’s well-established capabilities.
Despite Perplexity AI’s rapid growth and substantial funding, it remains a small player compared to Google. The future success of Perplexity AI depends on its ability to continuously innovate and attract a larger user base. With AI advancements and a substantial financial backing, Perplexity AI is poised to make significant strides. However, it must also navigate the competitive landscape and consistently deliver superior search results to gain a foothold.
