Will Perplexity AI, Co-founded by Aravind Srinivas, be Sold or Stay Independent

Online search platform Perplexity AI, reportedly valued at $14 billion, is expanding from online search to personal shoppers and a web browser Comet

June 25, 2025

Facebook parent Meta sought to buy Perplexity AI, CNBC reported last week. The two companies “did not finalize a deal,” the report added.

It is not known if the deal fell through because Apple is exploring buying Perplexity, according to a Bloomberg report last week. Or because Meta chose instead to invest in Scale AI, another artificial intelligence startup: $14.3 billion at a valuation of $29 billion. Or, if the major investors in Perplexity believe the San Francisco based artificial intelligence (AI) startup can achieve a far higher valuation operating as an independent company.

Perplexity offers an AI powered search and answer engine which answers a user’s natural language questions. Users “get instant, reliable answers to any question with complete sources and citations included,” co-founder and Chief Executive Aravind Srinivas states in blog post. “There is no need to click on different links, compare answers, or endlessly dig for information.”

In May, Perplexity handled more than 780 million queries, with this number growing over 20% each month, Srinivas told the Bloomberg Tech conference in San Francisco, earlier this month.

Users of Perplexity’s free plan are allowed unlimited basic searches but only three advanced searches per day. Subscriptions cost $20 per month or $190 per year. Paid subscribers can conduct unlimited advanced searches, using upgraded AI models, generate images, create custom knowledge hubs and collaborative spaces. Subscribers can upload multiple files, including emails, articles, PDFs, and images, and explore their contents with questions. They can organize search results in a library by project or topic, invite contributors and switch privacy settings. They can ask questions about their files as well as search the web, without leaving the platform.

Perplexity reportedly has more than 22 million active users and annual recurring revenue is estimated to be at a run rate of $160 million. It has more than 100 employees, according to Pitchbook.

In seven funding rounds, Perplexity has raised $915 million, according to Tracxn. Investors include venture fund IVP, Amazon founder Jeff Bezos, Softbank, and NVIDIA, whose computer chips power artificial intelligence (AI) tools and applications, including at Perplexity.

Using a form of machine learning, Perplexity blends large language model (LLM) tools, like OpenAI's Chat GPT, with a search engine. The answers are based on citations from news outlets, academic papers, and blogs, from across the internet.

Last week, the BBC threatened legal action against Perplexity if it did not stop using BBC content, delete any it holds, and pay financial compensation for material it has already used. In response to the BBC action, the Professional Publishers Association, which represents over 300 media brands in the United Kingdom, said the practice of AI tools being used to "illegally scrape publishers' content…without permission or payment…threatens the UK's £4.4 billion publishing industry and the 55,000 people it employs."

In a statement, Perplexity said, "The BBC's claims are just one more part of the overwhelming evidence that the BBC will do anything to preserve Google's illegal monopoly."

In October 2024, News Corp, publisher of The Wall Street Journal and The New York Post, sued to “seek redress for Perplexity’s brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce.” In response, Perplexity said in a statement, “our door is always open if and when…(they) decide to work with us in good faith, just as numerous others already have.” Perplexity has reached advertising revenue sharing deals with several media companies, including TIME and Fortune.

Apparently, News Corp and the BBC are not interested in similar deals since search advertising revenue is shrinking sharply due to the use of Perplexity, Google AI Overviews, and other search answer engines. Instead, they may be seeking direct payments from Perplexity similar to News Corp’s deal with Open AI. The deal, announced in early 2024, allows OpenAI to use the content of News Corp publications, including archives, to answer users’ queries and train its technology. In return, OpenAI could pay more than $250 million over five years to News Corp.

In 2022, Aravind Srinivas co-founded Perplexity with Denis Yarats, Johnny Ho, and Andy Konwinski, in part since he faced problems getting a U.S. work visa as a sole founder. Prior to co-founding Perplexity, from September 2021 to August 2022, Srinivas was a research scientist working on language and diffusion generative models at San Francisco based OpenAI. Earlier in 2018, he spent four months at the company as a research intern.

Srinivas earned a PhD in computer science from the University of California, Berkeley, 2021, and dual B.Tech and M.Tech degrees in electrical engineering from the Indian Institute of Technology, Madras, 2017.

In his first year at IIT Madras, Srinivas was disappointed after he failed to get in to the computer science program. However, his background in electrical engineering, and self-study through online courses, gave him a strong foundation in machine learning. IIT Madras was probably the only campus at that time that even had a professor working in AI and machine learning. If he was “somewhere else, I would not have been doing what I'm doing right now,” Srinivas told Ask IIT Madras.

From May 2020 to April 2021, while working on his PhD, Srinivas was a research intern at Google’s head office in Mountain View, California. For five months in 2019, he was a research intern at DeepMind, the London based AI research group owned by Google. He was inspired to start Perplexity by learning about the work done by Larry Page, co-founder of Google, Srinivas said at a First Mark Capital event in New York in November 2023..

The global generative AI market for creating content, including code, audio, images, simulations, text, and videos, is projected to grow to nearly $1 trillion by 2032, from $67 billion in 2024, according to Fortune Business Insights.

It is hence not surprising that Perplexity faces several competitors, from giant companies to startups. Competitors include Google Search, whose parent Alphabet has a market value of $2 trillion; Bing, a search engine owned by Microsoft, which has a market value of $3.6 trillion; ChatGPT Search, a search feature within chatbot ChatGPT, launched by OpenAI, which is valued at $300 billion; and a search engine from Anthropic, which develops AI tools and has a valuation of $62 billion.

In January 2024, in a blog post, Srinivas stated that Perplexity was founded on the belief that searching for information should be “free from the influence of advertising-driven models.” This statement is noted in a report from Contrary Research. Apparently, Srinivas’s blog post has been deleted from Perplexity’s site.

The startup plans to sell premium advertisements on its platforms. Last week, Srinivas posted on X/Twitter, “Perplexity will soon be your Personal Shopper. Think this + agentic check out + memory and browsing for good deals.” In a few weeks, consumers in the U.S. will be able to check out instantly with PayPal or Venmo when they ask Perplexity to find products, book travel, or buy tickets. Presumably, Perplexity will earn a fee for such sales via its platform as well as secure advertising revenues from vendors of the products and services.

Recently, Perplexity launched Comet, a web browser for agentic search, which has the potential to challenge Google’s Chrome and Apple’s Safari. Currently there is a waitlist to use the Windows version. Android and iOS versions are expected soon.

Speaking of the major potential revenue growth opportunities, Srinivas told Bloomberg, if people use Comet, “it’s infinite retention, so everything on the search box, everything on the new tab page, everything you’re doing on the sidebar, any webpage you are in, these are all going to be extra queries per active user…”

Perplexity’s valuation has risen nearly 28 fold in eighteen months. It is in late-stage talks to raise $500 million at a $14 billion valuation, CNBC reported last month; up from a valuation of $520 million in January 2024. If the personal shopper, and more so Comet, gain rapid, wide adoption, Perplexity’s valuation could soar far higher. Is this why the major investors did not pressure Srinivas to sell Perplexity to Meta?