Perplexity AI is about to enter a challenging period.

2024-05-20

At the Google I/O conference, the tech giant also introduced "AI Overviews," which can generate real-time summaries based on user queries - similar to the functionality of Perplexity, but more powerful. Aravind Srinivas, co-founder of Perplexity AI, was relaxed and busy with media affairs as the company's board welcomed new members. Meanwhile, OpenAI is attempting to launch a generative AI search experience, while Google announced multiple upgrades to Google Search. "Startups must actively compete with existing companies that already have billions of users, such as Google Search. OpenAI has 100 million users. We don't have such a user base yet, so we need to achieve this goal ourselves," Srinivas said in a recent interview with Bloomberg. Perplexity AI recently hired three industry leaders as new advisors to strengthen their expertise in search, mobile, and distribution: Emil Michael (former Uber executive), Rich Miner (co-founder of Android), and Mikhail Parakhin (former Bing CEO). "Parakhin is a world-leading expert in search infrastructure and its integration with large language models (LLMs)," said Srinivas, adding that Parakhin has been at the forefront of AI and search, and his expertise will enable them to evolve their core answer engine, establish internal search infrastructure, anticipate new and unexpected challenges, and integrate new AI capabilities. Perplexity has not given up: in recent weeks, Srinivas and his team have been iterating and releasing products and features faster to try to stay ahead of their competitors and new players in the field who are building similar solutions. Recently, the company partnered with SoundHound AI to bring large language model (LLM)-driven voice assistants to cars and IoT devices. This collaboration was announced prior to OpenAI's spring update, showcasing their features, or rather, characteristics, like "her." At the Google I/O conference, the tech giant also introduced "AI Overviews," which can generate real-time summaries based on user queries - similar to the functionality of Perplexity, but more powerful. However, Srinivas quickly pointed out the shortcomings and limitations of their competitors, saying, "When people go to Google Search, they hate bad latency and expect to see 10 blue links immediately." He explained that Google's user interface is quite cluttered, leaving people wondering if they will get token flows as answers, or ad links, or some random panels. Recently, OpenAI partnered with Reddit to bring richer content and new products to ChatGPT, helping users discover and engage with the Reddit community. Interestingly, the company mentioned in a blog post that it will also become an advertising partner for Reddit. Surprisingly, OpenAI does not intend to charge users too much and may be on its way to building its own search engine and monetizing it like Google Search. In the last quarter, Google earned $46.156 billion in revenue from search and related sources, a 14% year-on-year growth. To achieve this goal, OpenAI will use Reddit's Data API, which provides real-time, structured, and unique content from Reddit. This will enable OpenAI's AI tools to better understand and showcase Reddit content, especially content related to the latest topics. Coincidentally, Google also partnered with Reddit this year to train Gemini using its content. Let's not forget that OpenAI has also established content licensing partnerships with publishers, including The Associated Press, Axel Springer Group (owner of Business Insider, Politico, Bild, and Welt), Financial Times, Le Monde, Prisa Media Group (El País, Cinco Días, As, and El Huffpost), and Dotdash Meredith (owner of People, Better Homes & Gardens, Investopedia, Food & Wine, and InStyle), among others. In a recent podcast with Lex Fridman, OpenAI CEO Sam Altman said, "I think the intersection of large language models and search is a code that no one has cracked yet. I really want to crack it. I think that would be cool." The company has also hired Shivakumar Venkataraman, who has 21 years of experience at Google, where he led the search advertising business, as OpenAI's new Vice President. Venkataraman's rich experience in Google's search advertising makes him a valuable asset for OpenAI as they plan to build a "Google Search alternative." "We are a commercial company and will find many projects that can be monetized. This will help us provide free, excellent AI services to billions of people," wrote OpenAI CEO Sam Altman in a recent blog post. OpenAI reached a revenue milestone of $2 billion in December, and the company believes that based on the strong interest from enterprise customers in bringing generative AI tools into the workplace, they can double this number by 2025.