Perplexity CEO denies rumors of financial bottlenecks and IPO

AI is an expensive undertaking, and Perplexity also costs money for every user query. The development and operation of the AI search engine, which the company calls an answer engine, is also expensive. AI currently means constant updates, changes and new functions. So far, revenue streams have been a difficult undertaking – for OpenAI as well as for ChatGPT and all other major providers.

Now there have been rumors that Perplexity is even in financial difficulties. The rumors are largely based on a Reddit post. Someone wrote there that all marketing expenditure had been stopped. The search engine is also said to automatically switch to an auto mode and thus use a cheaper AI model in the background to save money. Some people also claim that the answers have recently become worse and worse, and there is criticism of the handling of sources and complaints anyway. The Perplexity CEO could not let this sit and also spoke out in a Reddit post.

Aravind Srinivas writes: “Many of you have had frustrating experiences in recent weeks and some questions have arisen. I would like to clarify.” Apparently, the quality has also dropped according to the CEO, for which he apologizes – for the lack of transparency. “Our product and our company have grown rapidly, we now need to scale up to cope with the size and to continue to deliver new things while keeping the product reliable.”

Perplexity does not yet want to go public

The switch to auto mode also has nothing to do with costs. It's about the AI deciding which model is best suited to an answer. And, as we know, this is not always the largest and most expensive model. Srinivas explains that models such as Deepseek R1 or o3-mini are not useful for a pro search because they are optimized for deeper searches and reasoning, i.e., logical thinking. GPT-4o, on the other hand, is good for quick summaries of content. The decision as to which model is used when is now partly made by Perplexity and no longer by the user.

Regarding the rumors about an IPO and low financing, Srinivas writes that they have sufficient funds and that revenues will continue to increase. He does not say how high these are. An IPO is not planned before 2028.

Finally, the Perplexity founder writes that there will be an AMA (Ask Me Anything) directly on Reddit in April. A date is not yet known.

(emw)