{"id":20269,"date":"2025-07-25T04:36:11","date_gmt":"2025-07-25T04:36:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/20269\/"},"modified":"2025-07-25T04:36:11","modified_gmt":"2025-07-25T04:36:11","slug":"will-perplexity-kill-google-probably-not-but-aravind-srinivass-startup-is-shaking-up-the-ai-race","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/20269\/","title":{"rendered":"Will Perplexity kill Google? Probably not, but Aravind Srinivas’s startup is shaking up the AI race"},"content":{"rendered":"

Aravind Srinivas wanted a simple answer. If Google<\/a> had given him one, things might have turned out differently\u2014for Srinivas and for Google.<\/p>\n

It was the fall of 2022, weeks before OpenAI would debut<\/a> its viral AI chatbot, ChatGPT. Srinivas, then 28, was an ambitious AI researcher with a PhD from UC Berkeley and prestigious internships at OpenAI and Google\u2019s AI labs under his belt, plus a year working full-time for OpenAI after earning his doctorate. Now he\u2019d left that plum job to launch a startup with three cofounders, all AI experts. Exactly what this startup would do, however, was a bit unclear.<\/p>\n

While they were still trying to decide, Srinivas and his cofounders hired their first engineer\u2014and that engineer needed health insurance. Srinivas had never picked an insurance provider before and had no idea how to go about it. So, like most people would, he asked Google: What is the best health insurance plan for a startup? Which HR software provides the best value for money? He quickly became frustrated with the results: The top links were all ads from insurance companies or SEO-optimized marketing content.<\/p>\n

But a better alternative was sitting at Srinivas\u2019s fingertips. One of the business ideas he and his cofounders had been playing around with was an AI tool that would use a large language model (LLM) to summarize information from multiple websites. The founders had even built a prototype. Srinivas remembers thinking, \u201c\u2018Let\u2019s at least ask this tool that we have.\u2019 And it started answering all these questions really well for us.\u201d Not only did the prototype help him find insurance, it also gave Srinivas his startup\u2019s mission.<\/p>\n

Weeks later, ChatGPT launched. Seven days after that, Srinivas and his cofounders debuted their San Francisco\u2013based company and its breakthrough product. They called both Perplexity\u2014borrowing a machine-learning term for how well an AI model makes predictions. Even amid the buzz around ChatGPT, Perplexity gained traction among Silicon Valley\u2019s elite and, through word of mouth, among consultants, analysts, and journalists. \u201cThey all said, \u2018Hey, this could be something better than Google<\/a>,\u2019\u201d Srinivas says.<\/p>\n

While Perplexity had a search-bar-style interface that looked like ChatGPT\u2019s, its outputs were distinct and better suited to some users. ChatGPT initially had no web access, drawing answers only from its training data, with no ability to discover up-to-date information. It couldn\u2019t cite its sources and was prone to \u201challucination<\/a>\u201d\u2014in which the model confidently spewed factually wrong information. Perplexity, by contrast, searched the web, and unlike Google, which delivered blizzards of blue links to comb through, Perplexity summarized what it found. Its answers included footnotes citing web pages where the model claimed to have found those bits of information. While this method did not eliminate hallucinations, it reduced them and made them easier to spot.<\/p>\n

ChatGPT could do almost anything involving language\u2014including holding personal dialogues, writing code, and crafting limericks about your boss. Perplexity can do some of those things, but it\u2019s optimized to do just one thing: answer factual questions concisely and accurately. While many talked about ChatGPT being a \u201cGoogle killer,\u201d the cognoscenti were whispering that the real threat was Perplexity. It could do what a Google Search could\u2014only better. As Srinivas liked to say, he was replacing the search engine with an \u201canswer engine.\u201d<\/p>\n

Two and a half years later, the answer engine is worth $18 billion\u2014based on July reports<\/a> that it raised venture capital at that valuation. Alongside prominent VC firms, the company counts Amazon<\/a> founder Jeff Bezos, Google chief scientist Jeff Dean, and Meta<\/a> chief AI scientist and deep learning pioneer Yann LeCun among its investors. Chipmaker Nvidia<\/a> is also a backer.<\/p>\n

Perplexity claimed $100 million in annual recurring revenue as of March\u2014the latest figure publicly available\u2014earned through premium subscriptions, sponsored follow-up questions, and enterprise access to its application programming interface (API). (The startup remains unprofitable, burning cash at a rate requiring frequent venture capital injections as it fine-tunes its technology.) And it has gained a toehold\u2014albeit a pinky toe\u2014against Google. It now boasts close to 1 billion queries each month\u2014impressive, though small compared with the 780 million weekly users ChatGPT claims and very small compared with Google\u2019s 83.8 billion monthly visitors.<\/p>\n

Google has not been killed. But the tech giant has been forced into making the most radical changes to its core search product in two decades. Google\u2019s share of search traffic dropped below 90% at the end of 2024, according to data from Statcounter, the first time it dipped below that threshold in 15 years. While the threat from ChatGPT has been the primary driver of these traffic changes<\/a>, Perplexity pioneered many of the AI search features that both Google and OpenAI have more recently rolled out.<\/p>\n

Now Google may have to dance to Perplexity\u2019s tune once again. The startup just launched an AI-native web browser called Comet that could represent the biggest shift in how we interact with the internet<\/a> since Netscape popularized the graphical web browser in the mid-1990s.<\/p>\n

Perplexity has become a lightning rod in debates over the relationship between AI companies and publishers, who fear that \u201canswer engines\u201d will obviate the need for audiences to visit their sites. But neither that controversy nor Perplexity\u2019s financial losses have deterred tech giants from eyeing it as a juicy acquisition target as they battle for AI dominance. It has already rebuffed an approach from Meta<\/a>, and it has been reported that Apple<\/a> has considered bidding for the company. While some analysts doubt Perplexity can go the distance against Google and OpenAI, few question that this scrappy company is having an outsize impact on how we find information in the AI age.<\/p>\n

\u201cIn a world where you can easily create fake content with AI, accurate answers and trustworthy sources become even more essential.\u201dARAVIND SRINIVAS, CEO AND COFOUNDER, PERPLEXITY<\/p>\n

Srinivas has been studying his competitor, Google, for most of his life. Growing up, he idolized current Google CEO Sundar Pichai, who hails from Srinivas\u2019s hometown, the Indian city Chennai. During his summer internship at Google DeepMind\u2019s London headquarters, Srinivas\u2019s rental accommodation was so shabby that he spent many nights sleeping at the office. While exploring DeepMind\u2019s library late one evening, he discovered In the Plex, a chronicle of Google\u2019s first 15 years by journalist Steven Levy. Srinivas devoured the book, reading it multiple times. \u201cThat changed my whole understanding of startups,\u201d he says. Reading about how two Stanford University computer-science PhD students, Larry Page and Sergey Brin, cofounded Google gave Srinivas\u2014halfway through his Berkeley PhD program\u2014hope that he, too, could found a company.<\/p>\n

At OpenAI, Srinivas was captivated by the power of LLMs to answer questions in plain English. But when he and his cofounders started Perplexity, they decided against trying to build their own LLM. \u201cIt was a decision driven through conviction and pragmatism,\u201d Srinivas says. Pragmatism because they were broke\u2014and training an LLM could cost tens of millions of dollars. Conviction in that it was already clear to Srinivas that AI models would become increasingly commoditized. Companies would have to differentiate themselves by what products they built on top of the base AI models, not by model capabilities alone. \u201cThere were already, like, five or six players building models,\u201d Srinivas says. \u201cSo we thought, \u2018Don\u2019t be the yet-another-model company.\u2019\u201d<\/p>\n

Srinivas and his cofounders initially used GPT-3.5, an LLM OpenAI had made available on a pay-per query basis. (A version of GPT-3.5 powered ChatGPT when it launched.) In the lingo of Silicon Valley, Srinivas\u2019s startup would be a \u201cwrapper\u201d\u2014creating a unique user interface and workflows that would \u201cwrap around\u201d OpenAI\u2019s model. (Perplexity now uses a variety of models from multiple AI companies.)<\/p>\n

As a student of Google\u2019s history, Srinivas knew that in 2001 Page had said the ultimate version of Google would be AI providing answers, not links. But Page didn\u2019t build that business, because AI was not yet capable enough. Instead, he and Brin built Google around links.<\/p>\n

Srinivas now says he and his cofounders \u201cdidn\u2019t really understand the innovator\u2019s dilemma facing the business model for Google.\u201d When Perplexity\u2019s answer engine launched, Srinivas says he expected Google to copy it. \u201cI was [thinking], \u2018Okay, at some point they\u2019re going to do it,\u2019\u201d he recalls. \u201c\u2018[Sundar Pichai] keeps writing blog posts about doing it.\u2019 But they didn\u2019t ship it.\u201d One reason for that: Google parent company Alphabet can\u2019t pivot to answers without potentially jeopardizing the $198 billion per year it makes from Google Search\u2014a figure that represents 57% of its revenues.<\/p>\n

Even today, three years after Perplexity\u2019s launch, Google has not overhauled its main search landing page, google.com, to match Perplexity\u2019s generative AI features. But it has inched ever closer<\/a>: It has expanded the use of \u201cAI Overviews,\u201d which provide summarized capsule answers with citations above the traditional link stack. In May, it also announced a new \u201cAI Mode\u201d for U.S. users that functions similarly to Perplexity.<\/p>\n

These features have started to hit Google\u2019s link clickthrough rates, with growth slowing from high-single-digit percentages to just 2% in the first quarter of 2025, according to Bloomberg Intelligence senior technology analyst Mandeep Singh. Singh says Google\u2019s \u201cad pricing remains strong, so there\u2019s no real impact on ad revenues yet.\u201d<\/p>\n

Still, the landscape is shifting. \u201cThe unit of value is shifting from the click to commercial intent fulfillment,\u201d says Chirag Dekate, a vice president, analyst at technology research firm Gartner<\/a>. In other words, Google is getting paid for producing sales for e-commerce customers, not for simply driving people to a website. Dekate argues that an AI-synthesized answer that directly leads to someone making a purchase \u201cis vastly more monetizable than a list of 10 links with ambiguous intent.\u201d<\/p>\n

Perplexity knows that speed is one of its advantages over Google, and it is racing to get to that next level of AI-driven commerce before the search giant. In July, the startup debuted what may be the world\u2019s first AI-native browser, Comet. Comet lets users navigate the web and use the address bar to ask Perplexity questions. But, more significantly, users can pull up an AI assistant that can read any tab the user has open and even open new ones and perform actions on the user\u2019s behalf, such as drafting and sending emails, filling out forms, booking travel, or preparing research reports\u2014all while the user is doing other things.<\/p>\n

Google\u2019s huge advantage in web commerce comes from knowing users\u2019 habits and preferences through Chrome, Android, Gmail, and Workspace. Perplexity sees Comet as a way to gain access to similar information. \u201cThe browser is what we live in during the day on our desktop devices. So it\u2019s just an incredibly powerful canvas,\u201d says Dmitry Shevelenko, Perplexity\u2019s chief business officer.<\/p>\n

\"DmitryDmitry Shevelenko is pursuing partnerships that could put Perplexity on more users smartphones.<\/p>\n

Winni Wintermeyer for Fortune<\/p>\n

Knowing user behavior helps Perplexity personalize its answers and makes its digital assistant more effective. The real gold mine is the assistant\u2019s ability to conduct commerce directly, potentially making Perplexity an important gatekeeper to purchases. It could act as what Microsoft\u2019s Bill Gates called a \u201cpersonal agent.\u201d Whoever builds the best personal agent will dominate, Gates said, because \u201cyou\u2019ll never go to a search site again. You\u2019ll never go to a productivity tool again. You\u2019ll never go to Amazon again.\u201d Comet is Perplexity\u2019s bid to win the personal-agent race.<\/p>\n

Perplexity isn\u2019t alone in contemplating an AI-native web browser. OpenAI\u2019s browser is expected to launch imminently, and in July, the company rolled out an AI agent that works independently of a browser. Google, meanwhile, could update Chrome to make it more agentic. But Shevelenko argues that with 3 billion people using Chrome, implementing an agentic AI browser\u2014which uses vastly more computing resources than a conventional browser\u2014 could be too expensive for Google to roll out broadly. Google\u2019s own mass, in essence, is now constraining it.<\/p>\n

\u201cTrust.\u201d The term comes up a lot in talking to Perplexity executives. \u201cThere is going to be a fundamental re-architecture of the internet around giving people answers instead of links,\u201d Shevelenko says. \u201cHow do you trust that answer? There is going to be a generational company born out of that.\u201d<\/p>\n

Srinivas likes to talk about trust, too, seeing it as Perplexity\u2019s fundamental differentiator. <\/p>\n

\u201cIn a world where you can easily create fake content with AI, accurate answers, trustworthy sources become even more essential,\u201d he says. He says that other AI companies would struggle to match Perplexity\u2019s factuality because those companies had competing goals. ChatGPT needs to be able to write poetry and brainstorm marketing ideas, give you advice about how to come out to your parents, and tell you how a nuclear reactor works. The creativity required for some of these tasks means OpenAI can never fully optimize ChatGPT for factual accuracy. For OpenAI, \u201challucination is a feature,\u201d Srinivas says. For Perplexity, \u201challucination is a bug.\u201d<\/p>\n

Because Perplexity needs to surface accurate, up-to-date information, its relationship with news publishers is vital\u2014but also fraught. Ask Perplexity a question about current events and its web crawlers will search news sites, scraping their content to inform its answer. Many publishers see this as an existential threat, disintermediating their relationship with their audience and denying them the ability to monetize traffic through advertising and subscriptions.<\/p>\n

Jessica Chan, who heads Perplexity\u2019s publishing partnerships, says she has fought to overcome these fears. \u201cOur success is tied to a thriving journalism and digital publishing ecosystem, because we know these journalists produce these high-quality, verified facts,\u201d Chan says. \u201cWe need the continual production of that type of information. There is really no world in which Perplexity is successful but publishers are not.\u201d<\/p>\n

\"JessicaJessica Chan is working to convince publishers that Perplexity is an ally.<\/p>\n

Winni Wintermeyer for Fortune<\/p>\n

Perplexity has partnered with several publishers, including Time, Le Monde, Der Spiegel, and the Los Angeles Times (and, full disclosure, Fortune). The company shares money it earns from sponsored follow-up questions that appear beneath AI-generated answers sourced from a partner publication\u2019s content. Perplexity also gives these publications access to its enterprise product and helps them build their own AI applications.<\/p>\n

Still, Perplexity\u2019s \u201canswer engine\u201d has angered plenty of publishers. Some accuse the company of flagrantly violating \u201crobots.txt,\u201d a voluntary protocol publishers use to signal that their content is off-limits to bots, despite Perplexity saying it would abide by the standard. Forbes threatened legal action against Perplexity for both scraping its content without permission and allegedly plagiarizing it verbatim in AI-generated answers without adequate citation. The BBC has sent a similar cease-and-desist letter to the company. And News Corp.\u2013owned Dow<\/a> Jones and the New York Post have sued Perplexity for copyright violations as well as \u201ctrademark dilution\u201d for attributing inaccurate AI-generated answers to News Corp.<\/a> Perplexity has said it was \u201csurprised and disappointed\u201d by News Corp.\u2019s suit and called its allegations \u201cmisleading at best.\u201d<\/p>\n

Srinivas says clashes are unfortunate, especially since Perplexity has been more upfront than Google about AI\u2019 future:\u201cWe\u2019ve been very transparent that this new interface will not send you as much traffic anymore.\u201d<\/p>\n

Data from internet infrastructure provider Cloudflare<\/a> support this: In 2015, Google scraped publisher websites twice for every person who clicked a link from Google to visit that site (which is called a referral). Recently, that\u2019s increased to 18 times per referral. For AI chatbots, the ratio is hugely lopsided: OpenAI scrapes 1,500 times per referral, Anthropic 60,000 times. Cloudflare, which handles 20% of internet traffic, has now started blocking web crawlers like the ones Perplexity uses by default, giving publishers the option to \u201cwhite-list\u201d some or to get paid per crawl. Chan says Perplexity applauds Cloudflare for experimenting with ways to help publishers find a business model that works for the AI era.<\/p>\n

Perplexity pioneered many features that have since been copied by rivals, from citations to followup questions. It was the first company to deploy DeepSeek\u2019s R1 \u201creasoning model\u201d and show users the
model\u2019s chain of thought\u2014the AI\u2019s internal dialogue about what steps it plans to take and why. \u201cThere\u2019s a lot of things that we\u2019ve done, micro-innovations around how we present answers, and our follow-up questions\u2014a lot of stuff that has shown up in other products, just because it works,\u201d says Henry Modisett, Perplexity\u2019s head of design.<\/p>\n

\"\"Henry Modisett, VP of Design at Perplexity AI.<\/p>\n

Winni Wintermeyer for Fortune<\/p>\n

Perplexity\u2019s biggest challenge is brand awareness. Everyone knows Google. Most people have played around with ChatGPT. Only a select few have heard of Perplexity. It\u2019s why some analysts are skeptical Perplexity\u2019s Comet will be a breakout hit. \u201cConsumers still trust Google\u2019s information more than ChatGPT\u2019s or Perplexity\u2019s,\u201d says Nikhil Lai, an analyst at tech research firm Forrester.<\/p>\n

Shevelenko acknowledges that the company has spent little on marketing so far, but he says that it plans to ramp up advertising around Comet. Perplexity is also targeting smartphone makers to gain wider distribution. It inked a deal with Motorola to have Perplexity preinstalled on its Razr and Edge 60 devices, and new customers will get a free three-month subscription to Perplexity Pro (which normally costs $20 per month). It announced a similar tie-up with Indian telecom carrier Airtel. Perplexity has also been in talks with Samsung<\/a> about a partnership<\/a> that would see Perplexity\u2019s app preloaded onto Samsung\u2019s top-of-the-line Galaxy smartphones and perhaps integrated into Samsung\u2019s mobile browser. It could also see Perplexity displace Google Gemini as the AI brain behind Samsung\u2019s digital assistant, Bixby.<\/p>\n

The U.S. government may also provide a critical tailwind. Last year, a federal district court judge ruled that Google maintains an illegal monopoly in search, and he is currently contemplating what remedies to order. The U.S. Justice Department has asked the judge to force Google to spin off Chrome and ban Google from paying to position its search engine as the default in others\u2019 products. Srinivas, who was the only AI startup CEO to testify in the remedies portion of the trial, says he thinks Google should retain Chrome but be compelled to allow Android users to more easily select alternative browsers\u2014including, say, Comet.<\/p>\n

780 million Number of queries processed by Perplexity in May<\/p>\n

Whatever the judge decides, Shevelenko says that the antitrust verdict has already helped the startup. \u201cA lot of [phonemakers] and carriers are more willing to work with us, just because they feel Google is going to be less aggressive in penalizing them or punishing them for engaging with a competitor,\u201d he says.<\/p>\n

83.3 billionNumber of site visits to Google in May
Sources: Perplexity; Similarweb<\/p>\n

Whether Perplexity can create an enduring company remains in doubt. Many industry watchers think it has already missed the narrow window it had to gain momentum before being overtaken by OpenAI and Google. \u201cThey just don\u2019t have the scale to compete,\u201d Bloomberg analyst Singh says<\/a>. \u201cTheir best outcome would be an acquisition by Apple.\u201d<\/p>\n

Srinivas has heard these kinds of doubts before. In some ways, he\u2019s been proving doubters wrong his whole life. He says he grew up in a family that was \u201clower-middle-class, even by Indian standards.\u201d His father worked as a chartered accountant; his mother worked for India\u2019s equivalent of the Social Security Administration. He studied electrical engineering, not computer science, as an undergrad. \u201cI had no network,\u201d he says. \u201cI had no mentors.\u201d<\/p>\n

Yet here he is, now commanding some of tech\u2019s most prominent stages. On a sweltering June afternoon, Srinivas, wearing a pale linen suit and lavender shirt, is speaking in a grand 19th-century hall in Oxford, England. The hall was purpose-built to host debates of the Oxford Union, the university\u2019s august debating society, and appearing here has become de rigueur for an American tech CEO on the make. It\u2019s a way to get on the radar of potential recruits\u2014especially computer-science students\u2014and to generate headlines and social media buzz.<\/p>\n

Srinivas tells the assembled Oxonians that despite being surrounded by hundreds of years of history, they should not become hidebound by tradition. \u201cAI will not be consumed with tradition,\u201d he says. \u201cThere have been many times in history when the conventional wisdom was wrong.\u201d<\/p>\n

Srinivas is hoping this is one of those times.<\/p>\n

This article appears in the August\/September 2025<\/a> issue of Fortune with the headline \u201cIs this man a Google killer?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Aravind Srinivas wanted a simple answer. If Google had given him one, things might have turned out differently\u2014for…\n","protected":false},"author":2,"featured_media":20270,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,5447,113,1333,21080,7452,21081,1996,105],"class_list":{"0":"post-20269","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-chief-executive-officer-ceo","14":"tag-google","15":"tag-meta","16":"tag-no-copyright","17":"tag-search","18":"tag-search-engine","19":"tag-tech","20":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/20269","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=20269"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/20269\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/20270"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=20269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=20269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=20269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}