By Jaspreet Singh
(Reuters) – Perplexity is raising new investments that would value the search startup at $9 billion, a source familiar with the matter said on Tuesday, a sign of heightened investor enthusiasm around artificial intelligence companies.
California-based Perplexity will raise $500 million in the new funding round led by venture capital firm Institutional Venture Partners (IVP), which also holds a board seat in the startup, the source said.
The company had raised $73.6 million in Series B funding in January. The funding round, led by IVP, had valued the company at approximately $520 million.
The massive success of OpenAI’s ChatGPT has drawn investors to AI startups as companies race to adopt the technology. Building large language models (LLMs) also requires billions in funding.
OpenAI closed a $6.6 billion funding round last month that could value the company at $157 billion and cement its position as one of the most valuable private companies in the world.
Since the release of ChatGPT, publishers have been sounding the alarm about chatbots that can crawl the Internet to find information and create paragraph summaries for users.
Media conglomerate News Corp publishers sued Perplexity in October, claiming the startup engaged in a “massive amount of illegal copying” of their copyrighted work.
New York Times (NYSE:) also sent Perplexity a “cease and desist” notice last month, demanding it stop using the newspaper’s content for generative AI purposes.
Perplexity, which provides information by searching the Internet, is also backed by Jeff Bezos, founder of Amazon.com (NASDAQ:), and chip designer Nvidia (NASDAQ:).
The AI company is among the leading companies trying to uproot the search engine market dominated by Alphabet’s Google (NASDAQ:).
The Wall Street Journal first reported the financing completed by Perplexity.
