Perplexity in Talks to Raise $1B at an $18B Valuation

At this point, if you blink in the AI world, you might miss a billion-dollar valuation jump. Just a year ago, Perplexity—an AI-powered search startup—was worth $1 billion. By December, that number had soared to $9 billion. Now, the company is reportedly in talks to raise $1 billion, which would double its valuation again to $18 billion.

Backing up that valuation is rapid revenue growth. According to Bloomberg, Perplexity’s annual recurring revenue has hit $100 million, proving that its AI-driven search model is gaining traction.

Positioning itself as a direct challenger to Google’s Gemini and OpenAI’s ChatGPT has also helped its reputation among investors. Instead of relying on pre-trained data like traditional AI chatbots, Perplexity delivers real-time, search-powered answers. That approach has helped it attract heavyweight backers, including Jeff Bezos and SoftBank.

But let’s zoom out for a moment.

Perplexity’s momentum isn’t just about what it’s building but more about investors chasing the next big AI bet. The entire AI sector is in a funding frenzy, and investors are pouring billions into companies vying for dominance.

OpenAI recently raised $6.6 billion, pushing its valuation to a staggering $157 billion. Meanwhile, Elon Musk’s xAI is reportedly eyeing a fresh funding round that could push its worth to $40 billion, nearly double its valuation.

But this potential funding doesn’t mean it’s a guaranteed success. The competition in AI-powered search is getting tougher. Anthropic just added web search to its chatbot, Claude, and Google is testing AI Mode, a chat-based search engine that could directly challenge Perplexity’s model. With the race to own AI-powered search heating up, Perplexity is already looking beyond its core offering.

To stand out, the company is expanding into new territory. It recently teased Comet, an AI-powered browser that could reshape how users interact with information online. It’s also making a play for the enterprise market, launching an AI-powered search engine for businesses to retrieve information from internal documents.

With AI valuations skyrocketing and the search industry evolving fast, Perplexity’s potential fundraising push is more than just a cash grab—it’s a signal that the company wants a seat at the table in the AI arms race. Whether it can hold its ground against Google and OpenAI remains to be seen, but for now, the money keeps flowing.