Generative artificial intelligence research startup Perplexity AI Inc. is reportedly finalizing details of a mammoth new funding round that would increase its valuation to $9 billion.

The startup, which has built an AI-powered search engine platform and competes with Google Search and OpenAI’s ChatGPT, is set to receive $500 million in this round. San Francisco-based venture capital firm Institutional Venture Partners is leading the round, according to reports from the Wall Street Journal And CNBCboth of which cite anonymous sources.

This round would make Perplexity one of the most valuable generative AI startups in the world. At the start of the year it was valued at just $520 millionbut successive financing cycles increased this number to 3 billion dollars at the end of June. In total, it has announced four funding rounds this year alone.

Perplexity is attracting more cash from investors, even as its competitors step up efforts to better compete with it. Last week, OpenAI revealed a new search feature with ChatGPT, its viral chatbot, while Google Search And Microsoft Corp.’s Bing The search engine has also added AI capabilities. In the case of ChatGPT’s search feature, it provides up-to-the-minute sports scores, stock prices, news headlines, weather and much more with its real-time internet search capabilities. real and the partnerships that its parent company has established with various publishers. and data providers.

Despite the competition, Perplexity is doing quite well, with its search application downloaded more than 2 million times to date. In August, it said it was processing around 230 million search queries each month. Last month, the Journal said its annualized revenue was about $50 million.

Like Google, Perplexity’s AI engine searches the web for the most recent information, but rather than producing a list of links, it will respond to user queries in a way that is more akin to ChatGPT.

The startup’s tools are free, but it makes money by selling premium subscriptions with more advanced features. In addition to targeting consumers, it also launched a professional version of its search engine aimed at businesses. This version can also search a company’s internal files to answer business questions.

The company is also considering integrating advertising into its platform, but has not yet done so.

Perplexity has also sparked a lot of controversy amid its rise to prominence, with a number of media outlets complaining that its search engine essentially plagiarizes their content when it produces its answers. In September, the New York Times reportedly sent Perplexity a cease and desist letter, asking him to stop crawling its web pages and using its content to generate responses. The Times accuses Perplexity of simply removing its web articles, which the startup denies.

Other websites, such as Forbes And Wired.comalso accused Perplexity of plagiarism, and the Journal’s parent company, Dow Jones, went further, continue the business on its practices.

In response to this controversy, Perplexity extended an olive branch in the form of revenue sharing model for publishers. It invites media companies to sign up for the program, and every time it generates ad revenue from a response citing one of their articles, it will share a percentage of that money with them.

The initiative appears to have satisfied a number of publishers, including Fortune, Time, Entrepreneur, The Texas Tribune, Der Spiegel and WordPress who have all signed on to the program.

For publishers, this could be quite lucrative. In July interview Speaking with CNBC, Perplexity chief commercial officer Dmitry Shevelenko said that if one of his responses cites three different articles from the same publisher, that partner would earn “triple the revenue share” than if a single link was used.

Image: AI Perplexity