AI startup valuations and revenues are going by the roof – but there’s a persistent concern that tech giants wielding frontier fashions will finally muscle into their territory.
Whilst founders stay optimistic about their firms’ futures, spectators on the web have typically ‘killed’ startups by their self-proclaimed verdicts.
Few perceive this pressure higher than Aravind Srinivas, CEO of Perplexity, which was just lately valued at $9 billion. Throughout a current Reddit AMA, Srinivas needed to deal with a flurry of questions on whether or not Google would possibly sometime render Perplexity out of date.
Lately, Google launched the brand new Gemini 2.5 household of fashions, which surpassed the competitors on benchmarks. Moreover, the corporate can be planning to announce an AI-heavy characteristic for its search engine, referred to as the AI Mode, whereas the AI Overviews characteristic is being rolled out to increasingly more customers.
When Srinivas was requested if Google will double down on AI-enabled search options that will render Perplexity “out of date”, he stated, “They [Google] have had two years to kill Perplexity and haven’t.”
Srinivas added that Google is reluctant to completely embrace AI-generated search responses as a result of they might undermine its promoting enterprise mannequin.
Not like conventional search outcomes, the place customers click on by hyperlinks (producing advert income), AI responses present data instantly throughout the search interface, eliminating the necessity to go to exterior web sites.
“Give it some thought: if AI gave you direct solutions to the rating in a basketball sport, how will you promote Ticketmaster adverts?” added Srinivas.
For context, Alphabet earned $72.46 billion in Google Promoting for the quarter that ended December 31 final 12 months.
‘Google Will Should Eat Its Income to Replicate Perplexity’
AIM reached out to Deedy Das, principal at Menlo Ventures, to know if and the way Perplexity will proceed to have a spot of its personal regardless of Google’s robust presence.
Like Srinivas, Das additionally emphasised that Google derives a considerable portion of its income from promoting, somewhat than from its AI fashions. So, would Google be inclined to experiment with one thing that generates revenue for them?
“Google will seemingly not construct the very same product as Perplexity as a result of it cannibalises its personal search enterprise, which pays the payments,” he stated.
Perplexity makes most of its income by paid subscription companies for people and enterprises. Nevertheless, in November final 12 months, the corporate introduced it will experiment with promoting to generate income to share with its writer companions.
In addition to, there’s additionally a powerful investor confidence in Perplexity. The corporate is reportedly in talks to boost funds between $500 million and $1 billion to double its valuation to $18 billion. Srinivas additionally just lately introduced that the startup has crossed $100 million in income.
For now, Perplexity goes robust, however assuming Google begins constructing merchandise of the precise nature, will it harm the stream of capital to Srinivas and Co.?
“Incumbents have the capability to copy something. They’ve more cash, expertise, and sources. By that logic, nothing ought to get funded,” stated Das.
“VCs fund Perplexity as a result of Google should eat into its personal income to copy it totally, they usually hope that customers will want the product expertise and transfer to it over time,” he added, indicating that Perplexity’s wholesome person base works in its favour.
Nevertheless, that doesn’t imply Perplexity is beneath no risk. Google operates at a large scale of over 2 billion month-to-month customers. Perplexity’s alternative lies in capitalising on the strategic dilemma Google faces, balancing innovation in AI with the chance of undermining its core advertising-driven enterprise mannequin.
“Gemini 2.5 Professional doesn’t pose a risk to Perplexity, however Google owns distribution for its search engine on almost all platforms, which is a risk to Perplexity,” stated Das, stating that the corporate should proceed to construct high-quality merchandise to maintain.
Comet to the Rescue?
Perplexity has ventured into numerous areas of AI, making it really feel unusual to classify it solely as a search engine. With in-house AI fashions like Sonar, alongside a deep analysis software, picture technology, purchasing, and monetary evaluation instruments, there’s a wealth of choices beneath their umbrella.
Its subsequent massive guess is an agentic browser referred to as Comet.
Within the AMA, Srinivas described Comet because the “final frontend for utilizing AI for day by day shopping”.
“[Comet is] a sidecar that allows you to have an AI together with you on any webpage you’re on. You need to use it for asking questions concerning the content material, extracting/formatting the content material to make use of for a activity, or run a analysis job on that web page/area,” he added.
Curiously, he claims it is going to be free from ads. He additionally stated that Comet would reply questions primarily based on the knowledge out there from the open tabs. “This manner, Perplexity is now not only a internet search software. It would search over all the things,” he added.
Srinivas additionally revealed that the unique plan was to launch it mid-April, however the firm is working “a few weeks behind timeline”. He stated the corporate is engaged on increasing entry to the waitlist within the subsequent two weeks and making it out there to all shortly after.
“Perplexity wants a browser like Comet to personal its distribution and hopefully present helpful options for its customers,” stated Das.
Even with Comet, distribution goes to be a mammoth activity for Perplexity, which Srinivas does agree with.
“Google owns Android, Apple has Safari, and Microsoft has distribution lock-in offers with Home windows OEMs. However something value doing is difficult. We’ll persist and discover methods round,” stated Srinivas.
The submit Google Has Had Two Years to ‘Kill’ Perplexity — and it Hasn’t: Aravind Srinivas appeared first on Analytics India Journal.
