Perplexity Seeks $500 Million in Funding with a $9 Billion Valuation

California-based artificial intelligence startup Perplexity is set to complete a new $500 million funding round. This round will dramatically raise the company's valuation to $9 billion. The funding is led by venture capital firm Institutional Venture Partners (IVP), which is part of Perplexity's board. This move follows a Series B funding round that the company completed in January, where it raised $73.6 million at a $520 million valuation.

This jump in valuation reflects the growing investor interest in AI companies, particularly after the success of OpenAI's ChatGPT. The race to develop large language models, which require significant investment, has become increasingly competitive. Last month, OpenAI completed a funding round of $6.6 billion, reaching a potential valuation of $157 billion.

The rise of artificial intelligence has not been without controversy. Publishers owned by News Corp filed a lawsuit in October, claiming that materials protected by copyright were extensively copied without permission by Perplexity. Additionally, The New York Times (NYSE:NYT) sent a "cease and desist" notice to Perplexity last month, demanding that the use of the newspaper's content for generative AI applications be halted.

Despite these challenges, Perplexity continues to attract high-profile backers, including Amazon.com (NASDAQ:AMZN) founder Jeff Bezos and chip manufacturer Nvidia (NASDAQ:NVDA). The company is recognized as a key player aiming to shake up the search engine market, which is currently dominated by Alphabet's (NASDAQ:GOOGL) Google.

The Wall Street Journal reported that Perplexity is in the final stages of securing the funding. The new capital is expected to further accelerate the company's growth and strengthen its position in the rapidly evolving AI sector.