Perplexity is abandoning plans to put adverts in its AI search product as the trade seems to be for sustainable enterprise fashions that gained’t harm consumer belief. The modifications are half of a bigger strategic shift for the firm, which has lengthy centered on disrupting Google Search’s enterprise.
“Google is altering to be like Perplexity greater than Perplexity is making an attempt to take on Google,” stated a Perplexity government at a press briefing on Tuesday. Executives spoke to the press on the situation of anonymity.
As an alternative of chasing mass adoption, Perplexity will lean into its subscription enterprise, with a spotlight on changing into the most correct AI service for builders, enterprises, and customers keen to pay a month-to-month charge. The corporate additionally plans to make partnerships with device-makers an even bigger a part of its enterprise transferring ahead.
The transfer marks a serious change for the firm, which was considered one of the first AI companies to begin experimenting with adverts in 2024. CEO Aravind Srinivas stated on a podcast that yr that he predicted adverts would ultimately be the firm’s core monetization engine. “I feel with promoting we could possibly be actually actually worthwhile,” he added.
Now, executives say they’re altering course as a result of adverts may make individuals mistrustful of Perplexity’s responses. Anthropic supplied the same explanation for not placing adverts in its chatbot, Claude, and poked enjoyable at ChatGPT’s adverts in a Tremendous Bowl business earlier this month.
However there could also be different causes Perplexity is not pursuing promoting.
Early buyers in Perplexity as soon as believed the startup may attain a whole lot of thousands and thousands and even billions of customers, however the startup’s progress hasn’t met expectations, in accordance to a supply shut to the firm. When the startup raised its Sequence B funding in 2024, board member and investor Cack Wilhelm stated in a blog post that Perplexity was “able to bringing the energy of AI to billions.” Two years later, that purpose nonetheless appears a good distance off.
Information from the third-party analytics agency Similarweb suggests Perplexity had simply over 60 million month-to-month energetic customers throughout its web site and cellular app in January. That’s greater than double the customers Perplexity had final yr, in accordance to Similarweb. Folks additionally now entry Perplexity through its AI-powered browser, Comet, which Similarweb doesn’t observe.
With out accounting for Comet, Perplexity’s consumer base on net and cellular is lower than 10 % of OpenAI’s ChatGPT and Google’s Gemini, which have 800 million weekly energetic customers and 750 million month-to-month energetic customers, respectively.
“Considered one of the issues that’s beginning to change into clear to us is that Perplexity isn’t for everybody,” one other Perplexity government instructed the press.
Promoting has been a powerful enterprise for firms like Google and Meta as a result of they’ve a whole lot of thousands and thousands of free customers. With out that scale, adverts doubtless change into a much less interesting enterprise mannequin.
Perplexity says it’s making a whole lot of thousands and thousands of {dollars} in income, primarily from client subscriptions, however it more and more expects progress to come from enterprise gross sales.
The AI search startup additionally appears to be making a extra concerted wager on powering different AI providers in 2026, with plans to maintain its first developer convention later this yr. The corporate’s pitch is that Perplexity could be an orchestration layer on prime of AI fashions from OpenAI, Google, and Anthropic, directing consumer queries to the finest mannequin for a given query.
Perplexity stated it has no plans to eliminate its free tier at the moment, regardless of its pullback from adverts. A technique the firm hopes to maintain providing merchandise to free customers is by means of partnerships, like the one it has with Motorola, the place Perplexity comes preinstalled on client units. Executives hinted that extra device-maker partnerships could possibly be on the horizon.
To its credit score, Perplexity has constantly been forward of the curve in growing sticky AI merchandise. Google’s take on AI-powered search, AI Mode, feels fairly related to Perplexity’s unique product. Apple and Meta reportedly expressed curiosity in buying Perplexity final yr.
“We are very a lot a client DNA firm,” stated a 3rd government. “That is why enterprise customers love our merchandise, as a result of it does not really feel like clunky enterprise software program.”
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