Perplexity AI, the artificial intelligence search startup, is reportedly seeking a $20 billion valuation in a new funding round, a move that follows its recent unsolicited bid to acquire Google's Chrome browser for $34.5 billion. This rapid surge in valuation underscores the intense investor interest in AI-driven technologies that aim to disrupt the dominance of traditional search engines like Google.
The potential $20 billion valuation marks a significant increase from the $18 billion valuation Perplexity AI achieved in July 2025. The company's valuation has skyrocketed by 3,746% since January 2024, when it was valued at $520 million. This meteoric rise reflects the broader investor enthusiasm for AI, where valuations are expanding rapidly despite questions surrounding profitability.
Founded in 2022, Perplexity AI has positioned itself as an "answer engine" that leverages generative AI to provide direct responses to user queries, complete with citations, rather than simply presenting a list of links. The startup has experienced rapid user growth, boasting over 22 million active users. The company's annual recurring revenue (ARR) now exceeds $150 million, a substantial increase from approximately $35 million a year prior. This growth has attracted investments from prominent backers, including SoftBank, Nvidia, and Jeff Bezos.
Perplexity AI's ambition extends beyond its AI-powered search engine. The company recently made headlines with its unsolicited $34.5 billion all-cash offer to acquire Google's Chrome browser. The offer, nearly double Perplexity's valuation at the time, was made amidst ongoing antitrust scrutiny of Google, which could potentially lead to a forced spin-off of Chrome. Perplexity AI's bid is viewed by some as a strategic move to gain a foothold in one of the internet's most widely used platforms, potentially boosting its influence and providing access to Chrome's over three billion users. The company pledged ongoing investment in Chromium, the open-source project upon which Chrome is built, and vowed to never stealthily replace Chrome's default search engine.
However, the Chrome bid has also been met with skepticism, with some industry observers suggesting it is a calculated public relations stunt designed to elevate the company's profile and signal its ambitions to investors, partners, and competitors. Analysts have pointed out that Perplexity, despite claiming backing from large venture capital funds, does not currently possess the funds necessary to complete the acquisition. Furthermore, Google is unlikely to be interested in selling Chrome and could appeal any ruling mandating a sale for years.
Prior to its audacious bid for Chrome, Perplexity had reportedly considered acquiring smaller browser companies to enhance its market presence and acquire key technology assets. The company already offers its own AI-enabled browser, Comet, to Perplexity Max subscribers. Regardless of the outcome of the Chrome bid, Perplexity AI's rapid valuation growth, high-profile investor base, and willingness to take bold steps have established it as a significant player in the AI-powered search landscape. The company's aggressive approach signals its intent to compete directly with the largest technology companies and expand into broader web services, solidifying its position as an emerging disruptor.
