Commentary

Why Bezos And Nvidia Investments In AI Search Startup Are A Game Changer

by Laurie Sullivan , Staff Writer @lauriesullivan, January 5, 2024

When do we stop calling search search? The former OpenAI founder of Perplexity, a startup heavily rooted in artificial intelligence (AI), says now.

Perplexity has won backing of new investors including Nvidia and Jeff Bezos, who is betting that AI will change the way people find information online. It has raised $73.6 million in Series B funding, which added a slew of new investors.

The latest round valued Perplexity at $520 million. Additional investors included Tobi Lutke, Bessemer Venture Partners, Naval Ravikant, Balaji Srinivasan, Guillermo Rauch, Austen Allred, Factorial Funds, and Kindred Ventures.

This round of investments follows an earlier Series A funding round. In total, the company has raised $100 million to date.

Perplexity is a service available on the web as a browser extension and in a mobile app that helps people search the internet with the support of a large language model (LLM).

"The word 'search' is going to change to 'ask' as we use AI to find information online," Perplexity cofounder and CEO Aravind Srinivas wrote in an email to Search & Performance Insider. "The era of sifting through SEO spam, sponsored links, and multiple sources will be replaced by a more efficient model of knowledge acquisition and sharing. You'll simply ask AI and get an answer."

Remember Ask Jeeves, eventually renamed Ask.com? The biggest difference is, I'm pretty sure, that Ask Jeeves didn't use AI to surface information.

"We stand at the inflection point of a massive behavioral shift in how people access information online," Srinivas wrote in a blog post.

But don’t call Perplexity a search engine, according to Srinivas, who previously worked at OpenAI as a research scientist. The company calls its service a "fully functional conversational answer engine" that relies heavily on AI, which is not unusual these days with Google and Microsoft infusing AI technology into their respective search platforms, tools and services.

The engine now has 10 million monthly active users and served more than half a billion queries in 2023. More than a million people have installed the mobile apps in iOS and Android, but similar to Google's launch in 1998, the founders of Perplexity have an ambition is to "serve the entire planet’s unbounded curiosity."

Cack Wilhelm, a general partner at IVP who led the latest funding round, will join the Perplexity Board of Directors.

I have been examining this question for months: When does the industry stop calling search search -- and in the process reached out to several long-time industry experts including Mike Gershan, CEO at Chelsea Digital, as well as Kevin Lee, co-founder of Didit and many other companies.

Each in their own way, they recognize the end of search as a tool that Google founders Larry Page and Sergey Brin helped to create.

Marty Weintraub, founder of AimClear, in an email to Search & Performance Insider, wrote that the AI revolution is on.

"AI will become even more of productivity and creativity enhancer, a job expander not a job replacer," he wrote. "Think about the creation of the Internet. Yes, many roles were lost- not many jobs. And, some professionals who held obsolete job descriptions were unable to adapt. For example, in the 90s, the best direct mail marketers became the best email marketers."

Multimodel search that bring in text, images, video and more will transform the industry this year. This is not not just about technology that searches the internet, but it will be redefined in a way as to how people use it.

Weintraub believes AI will level the "playing field" and "analysis will no longer be proprietary tools for elite programmers."

Update: A quote from Perplexity cofounder and CEO Aravind Srinivas was added.