This illustration, taken on January 4, 2024, shows the Perplexity AI logo.
Dado Ruvic | Reuters
Perplexity AI, the artificial intelligence startup embroiled in controversy over accusations of plagiarizing media content, plans to start running ads in its search app in the fourth quarter, CNBC has learned.
The company, which specializes in AI-assisted search, has distributed presentations touting the growing popularity and usage of its app. In a presentation viewed by CNBC, the company said its app has been downloaded more than 2 million times, has 230 million monthly users, and that searches in the U.S. have grown eightfold in the past year.
Perplexity raised new funding in April, valuing it at more than $1 billion, double its valuation three months earlier. But as the app's popularity has grown, concerns have emerged about how the company is featuring content from other sources.
Forbes reported in June that one of Perplexity's articles had been plagiarized, with no reference to the publication beyond a small “F” logo at the bottom of the page. A few weeks later, Wired also said it had found evidence that Perplexity had plagiarized a Wired article, reporting that an IP address “most likely associated with Perplexity and not listed in its public IP range” had visited the parent company's website more than 800 times over a three-month period.
The company told CNBC that in response to the allegations, it has changed how it cites sources in its Perplexity Pages feature, and has also updated it to better handle directly citing news outlets in generated copy.
Last month, Perplexity introduced a revenue-sharing model, giving publishers the opportunity to earn revenue through its search engine: Every time a user asks a question and Perplexity cites an article in an answer, Perplexity earns advertising revenue by sharing a portion of that revenue with the publisher.
Media and content platforms such as Fortune, Time, Entrepreneur, Texas Tribune, Der Spiegel and WordPress were among the first to join the company's “Publisher Program.” Perplexity's chief business officer Dmitry Shevelenko said in a July interview with CNBC that if three articles from a publisher are used in one answer, partners will receive “three times the revenue.” Shevelenko said the company has been working on the feature since January, with a goal of having 30 publishers on board by the end of the year.
Perplexity will use a model for ads called CPM, or cost per thousand impressions, said the people, who asked not to be identified because the details aren't public. CPM prices will be more than $50, the people said. Search marketing firm Semrush wrote in a blog post last year that CPMs for desktop display ads are typically around $2.50, while mobile video rates are around $11.10.
Perplexity said in its presentation that initial key ad categories will include topics such as technology, health and medicine, arts and entertainment, finance and food and beverage. Advertisers will be able to sponsor “related questions” beneath the answers and buy display ads to the right or in the answers generated by Perplexity.
More than eight in 10 Perplexity users hold bachelor's degrees, three in 10 work in “senior management positions,” and 65% work in “high-paying white-collar professions” such as medicine, law or software engineering, according to the presentation.
Investors see AI-assisted search as one of Google's key risks because it could change how consumers access information online. OpenAI, which sparked a generative AI boom with ChatGPT in late 2022, introduced a search engine called SearchGPT last month. In May, Google launched “AI Overview” in search, allowing users to see a quick summary of an answer at the top of the results.
WATCH: AI startup Perplexity launches publisher program
