While competitors in the field of artificial intelligence have introduced advertising to seek to monetize their technology, AI startup Perplexity has decided to abandon the advertising business, citing concerns that the move will erode users' trust in the platform.
San Francisco-based Perplexity has been one of the pioneers in commercializing generative AI. Back in 2024, the company began testing showing labeled "Sponsored Answers" beneath the chatbot's responses. However, company executives revealed on Tuesday that while it had tried the model, it had phased out advertising since late last year and had no plans to advance further.
“Users need to feel confident that they are getting the best answer possible in order to continue using the product and be willing to pay for it,” said a Perplexity executive. While Perplexity emphasized that previous ads were clearly identified and did not influence the content of bot-generated responses, management believes that the introduction of ads will inherently make users “start questioning everything,” so this is not the company’s current focus.
This decision goes against the prevailing trends in the AI industry. In order to cover the huge financial expenditure required to train and maintain large language models, industry giants including OpenAI and Google are accelerating monetization from free users through advertising. OpenAI began testing ads in the free version of ChatGPT last week, and Google has also embedded ads in its AI Overviews. However, Google’s current Gemini chatbot has not yet introduced ads. By contrast, Anthropic also promised this month that its chatbot Claude would remain ad-free.
It is worth noting that Perplexity was also one of the first platforms to launch shopping functions, followed by Google and OpenAI to launch similar functions. But unlike its competitors, Perplexity executives say the company doesn't profit from the feature or a cut of sales.
Currently, Perplexity is valued at US$18 billion, with annualized revenue of approximately US$200 million, with its main source of revenue coming from subscription services. The platform offers free services as well as paid tiers ranging from $20 to $200 per month and has more than 100 million users.
Company executives stressed that Perplexity's top priority right now is ensuring the accuracy of its answers. One executive said bluntly: "We are in the 'accuracy business,' and our core is to provide the truth and the right answer." While he did not rule out the possibility of reconsidering advertising in the future, the executive said that the current advertising is "inconsistent" with user needs, and the company may even "never need to advertise."