Perplexity, the fast-rising AI search engine startup, is raising yet another round of funding that could push its valuation to $20 billion, according to an email sent to prospective investors and a source familiar with the matter who spoke with Business Insider.
The figure represents a $2 billion leap from its $18 billion valuation secured in July, as first reported by Bloomberg, and a dramatic rise from its $520 million valuation in January 2024.
Founded in 2022, Perplexity has positioned itself as one of the most aggressive challengers in the AI sector, blending large language models with web search to deliver real-time, conversational answers. Over the past year, the company’s business trajectory has been nothing short of meteoric.
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Annual recurring revenue soared from about $35 million in mid-2024 to over $150 million by the middle of 2025 — more than quadrupling in just 12 months.
We are currently doing more than $150 million in ARR, Perplexity’s head of communication, Jesse Dwyer, confirmed, declining to elaborate further.
The company has attracted heavyweight backers, including SoftBank, Nvidia, and Amazon founder Jeff Bezos, raising approximately $1.5 billion to date, according to PitchBook. But its latest moves suggest it is aiming to project even greater influence.
Earlier this week, Perplexity stunned the tech world by announcing a $34.5 billion bid, a figure nearly 100% higher than its expected valuation, to acquire Google’s Chrome browser. The proposal came as the Department of Justice pressured Google to divest Chrome over antitrust concerns. While Google has not indicated any willingness to sell, Perplexity claims it has secured commitments from several large venture capital funds to finance the purchase, though it has not disclosed names.
Analysts and industry insiders have been quick to question the seriousness of the bid. One venture capitalist, speaking anonymously to BI, dismissed it as “little more than a marketing stunt,” suggesting the move was designed to position Perplexity as a dominant player in the public eye, attract top talent, and secure more capital.
The timing of the Chrome play coincides with heightened competition in the AI browser space. Perplexity recently launched its own AI-native browser, Comet, directly challenging Google, Apple, and AI leaders like OpenAI, which is reportedly developing a browser of its own.
That competitive dynamic has also fueled speculation that Perplexity could become an acquisition target itself, particularly for Apple, which many analysts say is lagging in the AI race. Dan Ives, managing director at Wedbush Securities, has called an Apple acquisition of Perplexity a “no-brainer deal,” warning that “time is ticking” for the iPhone maker. Perplexity, for its part, insists it is “unaware of any M&A discussions” involving Apple.
Playing the Long Game in the AI Power Struggle
Perplexity’s pursuit of a $20 billion valuation, alongside its audacious bid for Chrome, appears designed to cement its status as a top-tier AI company in a market dominated by trillion-dollar incumbents.
The target valuation of $20 billion, while impressive, remains modest compared to the giants of the AI industry. OpenAI’s valuation is at least 10–25 times larger, depending on whether the realistic or optimistic figures are used. Even xAI, with its rapid funding and ambitious targets, sits at 4 to 10 times Perplexity’s valuation. And Alphabet, with its Gemini platform, operates on an entirely different scale—its sheer size highlights how far behind Perplexity still is.
AI Leaders’ Valuations vs. Perplexity
OpenAI
OpenAI recently completed a massive $40 billion funding round in March 2025, establishing a post-money valuation of approximately $300 billion.
Moreover, discussions are underway that could push OpenAI’s valuation even further—to around $500 billion—through a secondary share sale, allowing employees to cash out.
xAI (Elon Musk’s AI Venture)
Elon Musk’s AI firm xAI, merged with his social media company X under the banner X.AI Holdings, was valued at about $80 billion post-merger, with X (formerly Twitter) valued separately at $33 billion.
Recent funding maneuvers have brought its valuation up to approximately $113 billion, supported by debt and equity raises, including a $5 billion debt package.
Beyond that, xAI is reportedly targeting a valuation between $170 billion and $200 billion in upcoming rounds.
Google’s Gemini
Although Google’s Gemini initiative doesn’t come with a standalone valuation, Alphabet—the parent company—remains a multi-hundred-billion-dollar enterprise. For context, Alphabet is valued in the $500-$560 billion range, dwarfing Perplexity’s valuation. Gemini itself powers a significant portion of Alphabet’s AI strategy.
However, Perplexity’s rise in valuation—from just $520 million in early 2024 to an intended $20 billion in mid-2025—does mark remarkable progress. Still, in the race for AI dominance, the real heavyweights have already surged ahead in capital and influence.
While the Chrome offer may never materialize, the spectacle itself boosts the company’s visibility and helps frame it as a legitimate contender in the next phase of the internet’s evolution.
If successful in raising fresh capital at this valuation, Perplexity would have greater resources to accelerate its expansion, improve its AI infrastructure, and potentially fund high-profile acquisitions of its own. But the real strategic gamble may be in perception — convincing investors, talent, and the market that it is not merely another promising AI startup but a long-term platform capable of reshaping search and browsing at a global scale.