Google Has Had Two Years to ‘Kill’ Perplexity — and it Hasn’t: Aravind Srinivas
AI startup valuations and revenues are going through the roof – yet there’s a persistent concern that tech giants wielding frontier models will eventually muscle into their territory. Even as founders remain optimistic about their companies’ futures, spectators on the internet have often ‘killed’ startups through their self-proclaimed verdicts. Few understand this tension better than Aravind Srinivas, CEO of Perplexity, which was recently valued at $9 billion. During a recent Reddit AMA, Srinivas had to address a flurry of questions about whether Google might someday render Perplexity obsolete. Recently, Google released the new Gemini 2.5 family of models, which surpassed the competition on benchmarks. Additionally, the company is also planning to announce an AI-heavy feature for its search engine, called the AI Mode, while the AI Overviews feature is being rolled out to more and more users. When Srinivas was asked if Google will double down on AI-enabled search features that may render Perplexity “obsolete”, he said, “They [Google] have had two years to kill Perplexity and haven’t.” Srinivas added that Google is reluctant to fully embrace AI-generated search responses because they could undermine its advertising business model. Unlike traditional search results, where users click through links (generating ad revenue), AI responses provide information directly within the search interface, eliminating the need to visit external websites. “Think about it: if AI gave you direct answers to the score in a basketball game, how can you sell Ticketmaster ads?” added Srinivas. For context, Alphabet earned $72.46 billion in Google Advertising for the quarter that ended December 31 last year. ‘Google Will Have to Eat Its Revenue to Replicate Perplexity’ AIM reached out to Deedy Das, principal at Menlo Ventures, to understand if and how Perplexity will continue to have a place of its own despite Google’s strong presence. Like Srinivas, Das also emphasised that Google derives a substantial portion of its revenue from advertising, rather than from its AI models. So, would Google be inclined to experiment with something that generates profit for them? “Google will likely not build the exact same product as Perplexity because it cannibalises its own search business, which pays the bills,” he said. Perplexity makes most of its revenue through paid subscription services for individuals and enterprises. However, in November last year, the company announced it would experiment with advertising to generate revenue to share with its publisher partners. Besides, there’s also a strong investor confidence in Perplexity. The company is reportedly in talks to raise funds between $500 million and $1 billion to double its valuation to $18 billion. Srinivas also recently announced that the startup has crossed $100 million in revenue. For now, Perplexity is going strong, but assuming Google starts building products of the exact nature, will it hurt the flow of capital to Srinivas and Co.?“Incumbents have the capacity to replicate anything. They have more money, talent, and resources. By that logic, nothing should get funded,” said Das. “VCs fund Perplexity because Google will have to eat into its own revenue to replicate it fully, and they hope that users will prefer the product experience and move to it over time,” he added, indicating that Perplexity’s healthy user base works in its favour. However, that doesn’t mean Perplexity is under no threat. Google operates at a massive scale of over 2 billion monthly users. Perplexity’s opportunity lies in capitalising on the strategic dilemma Google faces, balancing innovation in AI with the risk of undermining its core advertising-driven business model. “Gemini 2.5 Pro does not pose a threat to Perplexity, but Google owns distribution for its search engine on nearly all platforms, which is a threat to Perplexity,” said Das, pointing out that the company will have to continue to build high-quality products to sustain. Comet to the Rescue? Perplexity has ventured into various areas of AI, making it feel strange to categorise it solely as a search engine. With in-house AI models like Sonar, alongside a deep research tool, image generation, shopping, and financial analysis tools, there is a wealth of offerings under their umbrella. Its next big bet is an agentic browser called Comet. In the AMA, Srinivas described Comet as the “ultimate frontend for using AI for daily browsing”. “[Comet is] a sidecar that lets you have an AI along with you on any webpage you are on. You can use it for asking questions about the content, extracting/formatting the content to use for a task, or run a research job on that page/domain,” he added. Interestingly, he claims it will be free from advertisements. He also said that Comet would answer questions based on the information available from the open tabs. “This way, Perplexity is no longer just a web search tool. It will search over everything,” he added. Srinivas also revealed that the original plan was to launch it mid-April, but the company is running “a couple of weeks behind timeline”. He said the company is working on expanding access to the waitlist in the next two weeks and making it available to all shortly after. “Perplexity needs a browser like Comet to own its distribution and hopefully provide useful features for its users,” said Das. Even with Comet, distribution is going to be a mammoth task for Perplexity, which Srinivas does agree with. “Google owns Android, Apple has Safari, and Microsoft has distribution lock-in deals with Windows OEMs. But anything worth doing is hard. We will persist and find ways around,” said Srinivas.
Will they ever?
Will they ever?
["Perplexity AI"]
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["AI", "Gemini 2.5", "Aim", "R", "Go", "API", "RPA", "innovation", "startup", "Replicate"]
Supreeth is an engineering graduate who is curious about the world of artificial intelligence and loves to write stories on how it is solving problems and shaping the future of humanity.