Perplexity AI is near completion of a $500 million funding round at a valuation of $9 billion.

• A source close to the matter revealed to CNBC that Perplexity AI is near the completion of securing $500 million in funding at a valuation of $9 billion.
• The AI search engine startup faces competition from companies such as Google and OpenAI, the creator of ChatGPT.
• Perplexity's valuation has increased to $2 billion after four funding rounds this year, despite the generative AI boom.

CNBC reported that Perplexity AI, an artificial-intelligence search engine startup, is near the completion of raising $500 million in funding at a valuation of $9 billion, according to a source close to the matter.

The startup is competing against companies such as and OpenAI, with Perplexity's most recent valuation being $3 billion in June. Institutional Venture Partners, a Bay Area-based firm, is leading the new funding round, according to a source who requested anonymity since the funding is not yet public.

Perplexity's valuation has increased to $2 billion after four funding rounds this year, despite the generative AI boom.

This week, OpenAI introduced a search feature within ChatGPT, its popular chatbot, to enhance its competition with Perplexity and leading search engines such as Google and Microsoft's Bing. The search feature provided by OpenAI offers real-time sports scores, stock quotes, news, weather, and more, powered by partnerships with news and data providers.

Although AI technology is rapidly advancing, Perplexity has been embroiled in controversy due to accusations of plagiarizing content from media outlets. Last month, Perplexity received a "cease and desist" notice from the news outlet, claiming that the startup scrapes their content to generate answers. Perplexity has denied these allegations.

Perplexity introduced a revenue-sharing model for publishers in July. For every question a user asks and Perplexity generates ad revenue from referencing an article in its response, the company will share a portion of that revenue with the publisher, according to the statement.

Since January, Perplexity has been working on its revenue-sharing model and aims to have 30 publishers enrolled by the end of the year. In a July interview with CNBC, Dmitry Shevelenko, Perplexity's chief business officer, revealed that if three articles from one publisher are used in one answer, the partner will receive "triple the revenue share." Among the first to join the company's "Publishers Program" were media outlets and content platforms such as Fortune, Time, Entrepreneur, The Texas Tribune, Der Spiegel, and WordPress.

In August, the company announced that its Perplexity app has been downloaded over 2 million times and answers more than 230 million queries per month. According to a pitch deck viewed by CNBC, U.S. queries have increased eightfold in the past year.

The Wall Street Journal was first to report on the new funding round.

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