A new AI darling is making significant waves in Silicon Valley. This innovative startup, known as Perplexity, has recently caught the attention of major tech giants, with both Meta and Apple reportedly exploring acquisition opportunities. Following a substantial funding round in May, Perplexity has reached a staggering valuation of $14 billion, positioning itself as a formidable challenger to Google's dominance in the search engine market.
Perplexity presents itself as an “answer engine.” Users can pose questions, and the platform leverages advanced large language models to generate coherent summaries that include references. Essentially, it operates similarly to ChatGPT but with added bibliographic support. For instance, you might inquire about the best books on the French Revolution or seek an analysis of the Genius Act. In mere seconds, Perplexity delivers a concise paragraph enriched with links to sources like Wikipedia, news articles, or Reddit discussions. Its appeal lies in offering a cleaner, ad-free search experience that eliminates the clutter typically associated with traditional search engines.
Despite its sleek interface and rapid performance, critics argue that Perplexity is merely a polished facade over existing technologies, primarily Google and OpenAI’s APIs. Many believe that the platform lacks innovative proprietary technology and primarily serves to reorganize existing online content. This skepticism has not deterred the hype surrounding the startup. In May 2025, Perplexity successfully closed another funding round, securing an impressive $500 million, which propelled its valuation from $9 billion in December 2024 to its current status.
With its rapid growth, Perplexity is increasingly viewed as a potential “Google killer.” The platform's traffic has surged, and it now boasts a Chrome extension, a mobile application, and a premium version that grants access to top-tier AI models like GPT-4 and Claude. However, the question remains: what exactly justifies Perplexity's lofty $14 billion valuation beyond its position in the booming AI sector?
For many AI skeptics, the rise of Perplexity highlights a disconnect between hype and actual innovation. Critics point out that the platform does not train its own models or develop new infrastructure; instead, it provides a user-friendly interface that generates AI-driven summaries from publicly available websites. This raises significant concerns about intellectual property and content ownership. Several prestigious news organizations, including The New York Times, Forbes, and Wired, have accused Perplexity of scraping content without proper attribution. Recently, the BBC became the latest outlet to threaten legal action against the startup, alleging misuse of its content in training its AI model.
In response to the backlash, Perplexity's CEO, Aravind Srinivas, has positioned the company as an “aggregator of information.” To address concerns from content creators, the startup launched a revenue-sharing program in July 2024, aimed at creating a mutually beneficial environment. “We have always believed that we can build a system where the whole Internet wins,” Srinivas stated.
The underlying reason for the frenzy surrounding Perplexity is simple: search is money. Google reported earnings of $50.7 billion from search ads in the first quarter of 2025, marking a 9.8% increase from the previous year. If Perplexity can attract even a fraction of Google’s user base and successfully monetize its services, it could emerge as a genuine threat to the tech giant. Both Apple and Meta, wary of their reliance on Google, see Perplexity as a critical player in the evolving AI search landscape.
The stakes extend beyond mere competition; whoever controls the next generation of search interfaces holds the key to user engagement. Just as Google displaced Yahoo, Perplexity has the potential to redefine the search experience. This prospect explains why major tech companies are keenly interested in Perplexity, despite uncertainties about what they would acquire in such a deal.
