AI search track ramps up again as startup Perplexity closes funding at $9 billion valuation

The company's valuation has tripled since June.

Aravind Srinivas, co-founder and CEO of Perplexity

Perplexity AI Inc. is an artificial intelligence startup developing a search product to compete with Alphabet Inc.'s Google. The company has closed a $500 million round of funding, giving it a valuation of $9 billion, tripling from the previous round, according to people familiar with the matter.

The round was led by Institutional Venture Partners and closed earlier this month, according to a person familiar with the matter. The person requested anonymity because the information discussed was private.Perplexity declined to comment.

Even by the high standards of other top AI startups, Perplexity's valuation has grown rapidly this year. In April, Perplexity was valued at $1 billion. By June, that figure had risen to $3 billion after receiving an investment from SoftBank Group's Vision Fund 2. The new $9 billion valuation includes the amount of the most recent funding round.

The funding round reflects investor enthusiasm for redefining online search through generative AI. Perplexity, founded in 2022, differentiates itself from other AI chatbots by providing more real-time information. But the startup faces growing competition: OpenAI, the developer of ChatGPT, began rolling out its search function to all users this week. Microsoft Corp. and Google have also overhauled their search products to include more conversational AI features.

Perplexity offers several services in addition to paid and free versions of its search tool. The startup launched a product that allows organizations to search internal documents and introduced new finance-related features including access to stock prices and company earnings data. In March, the company said it had more than 15 million active users.

The company also launched a series of revenue-sharing partnerships with major publishers, including Time and Fortune, after it was accused of plagiarism by some news organizations.

In addition to SoftBank, Perplexity's backers include Amazon.com founder Jeff Bezos and Nvidia Corp.