Perplexity AI is raising a lot more money for a $2.5-3 billion valuation | TechCrunch Minute

The biggest news in AI this week is that Perplexity AI a startup that just Announced that it raised $ 62.7 million At A1 billion doll valuation is Raising More a lot more now perplexity AI is a AI search engine of sorts one that I Have tested and played with some it's Pretty cool it has some technology Called online llms AI models that use Perplexities inhouse search technology To actually stay up to date but it's not Just neat Tech it's also very rapidly Growing business with about $20 million Worth of annual recurring Revenue today And it's growing very fast Bloomberg Reports that the company has handled Quote more user queries in the US so far This year nearly 75 million than it did In all of 2023 that's the kind of growth That VCS absolutely love but what's Bonkers is that despite just announcing A new fundraise and a new higher Valuation Tech Run's ingred London Reports that the company is looking to Raise at least least $250 million at a Valuation between 2.5 and 3 billion that Is a lot of money at a very very high Price the good news is that perplexity Is not alone in raising money VC's are Writing many checks to many different AI Startups as well pitchbook data says That Venture capitalists invested about 26 billion do globally into AI focused Startups in the first quarter of this

Year and that was up from about 22 Billion in the same period of last year So it seems that at least some AI Startups are growing fast enough to keep Those key Venture dollars flowing but While the perplexity news is Big there Are also signs of weakness in the Startup AI Market that we have to pay Attention to toome a buzzy company is Shaking up its business model to pick One example while stability AI is Enduring layoffs AI is moving so fast That hot companies can actually cool off As quickly as they got warm which is Crazy what is more stable however is the Massive Push by big tech companies to Keep their own AI Cadence up so just in The last couple of days we have seen Adobe drop a new image creation model It's called the Firefly image 3 it's the Third generation of that model and our Testing does seem to say that it is much Better then Microsoft has a new Microscopic model out called 53 which is Very cool we talked about meta's new Llama 3 models on this show the other Day and recently Amazon is making a push Because it wants to host your custom Models on its Cloud compute system That's a lot in a very short time from Some very big companies that are Typically slow and ponderous and not Nimble and quick and yet when it comes To AI they seem to be able to do a lot

Very quickly channeling my inner Economist it's amazing how incentives Can change Behavior a question though That we've asked before on this show is Where the AI winnings are going to fall Will big Tech companies that are quick To invest in Foundation model companies Flex their compute platforms and be able To offer up their massive Enterprise Customer bases eat upmost of the earned Value well perplexities quick growth and Fundraising makes the point that the Answer is at least going to be not Entirely but the scale differential We're discussing here is worth keeping In mind Microsoft's most recent Quarterly operating income was $27 Billion that works out to about $300 Million per day put another way Microsoft's operating profit per day was 15 times bigger than perplexity entire Yearly Revenue Pace or in accounting Terms I believe that's spelled out wamp Wamp and wamp at least VC's are still Busy here's hoping that at least one Startup out there will take a bite out Of a giant but while perplexity is doing Good it remains a small fish in a very Big pond I'll see you tomorrow