Perplexity AI Inc., a startup developing an AI-powered search engine, has raised US$100 million in a recent funding round.

This brings its valuation to US$18 billion, according to sources familiar with the matter.

The funding is part of an extension from an earlier round this year, which valued the company at US$14 billion.

Founded in 2022, Perplexity has experienced rapid growth, with its valuation tripling multiple times within a year.

This aligns with reports of plans to raise US$1 billion at an US$18 billion valuation.

Perplexity aims to compete with traditional search engines like Google by using generative AI technology.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Perplexity’s valuation growth exemplifies unprecedented acceleration in AI funding cycles

Perplexity’s trajectory from founding in 2022 to an $18 billion valuation in 2025 represents a dramatic acceleration of startup valuation timelines compared to previous AI leaders.

This speed significantly outpaces earlier AI unicorns like SenseTime, which reached a $3 billion valuation in 2018 after four years of operation 1.

In just one year, Perplexity has multiplied its valuation from $1 billion to $18 billion—a growth rate that would have taken much longer in the pre-2020 funding environment.

According to Stanford’s 2025 AI Index Report, U.S. private AI investment reached $109.1 billion in 2024, with generative AI specifically attracting $33.9 billion 2.

This concentration of capital in fewer, high-potential companies reflects investors’ willingness to place larger bets on AI startups they believe can challenge established tech giants.

2️⃣ Investor focus shifts from AI capabilities to commercial applications with clear monetization

The 2025 AI funding landscape shows a significant pivot from investing in general AI capabilities to applications with direct commercial potential and clear paths to revenue.

Recent Perplexity developments