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Bezos-backed Perplexity AI seeks to double valuation with $8 billion push while new funding round targets $500 million raise, to advance AI search technology

Perplexity AI, an AI company funded by Jeff Bezos and also sponsored by Nvidia, has launched fundraising talks to more than double its valuation to $8 billion or more, according to The Wall Street Journal report released on October 20. It plans to raise about $500 million in the upcoming funding round.

According to people familiar with the matter, the report added, the estimated annualised revenue by the company based on its recent sales is around $50 million. Founded as an AI search tool provider, Perplexity AI offers instant answers to queries raised by users with complete sources and citations. It uses various LLMs: the OpenAI models and Meta's open-source model LLaMA. These tools help users generate and summarize information rapidly and effectively.

As of now, Perplexity AI has declined to comment on the current fundraising talks.

On the other hand, Perplexity AI has found itself in a series of court battles with different media houses over the use of their content in creating AI models. In October 2024, the startup revealed that it received a “cease and desist” notice from The New York Times urging the company to stop using its newspaper's content in its AI models. Perplexity also faced controversy over plagiarism allegations by Forbes and Wired, as the authors lay claims of having plagiarized their content. To address these concerns, the startup launched a revenue-sharing program with publishers, hoping to ease tensions.

However, the company will make a significant fortune round in raising its valuation to $8 billion, which might be indicative of investors' confidence in AI technologies. This funding will particularly help the ones that specialize in rapid data retrieval and summarizing. It will also aid in ramping up the demand for AI-driven tools that simplify accessing information which the company has carved out a niche for itself despite facing legal challenges so far.

As funding talks appear to continue, Perplexity focuses on expanding its capacity while working out the knot of proprietary media content complexities in its generative AI models. Fresh fundraising rounds could cement its standing in the competitive landscape of AI and the attendant norm of corporate movements to seize the potential of AI for future change in content creation and information dissemination.