s OpenAI jumps headfirst into advertising, another AI leader has taken a stance against it. We're not talking about Anthropic, we're talking about Perplexity.

Last week, Perplexity told reporters at a press briefing that the AI search tool is backing away from its advertising plans and increasing its focus on its subscription business. Though it doesn’t intend to get rid of its free tier, Perplexity plans to pay for it by partnering with device makers moving forward.

The decision follows OpenAI facing heat over its decision to embed ads into its popular chatbot. Perplexity executives fear that embedding ads into its platform may diminish consumer trust in its product. Instead, with its subscription business, Perplexity may be eyeing Anthropic’s primary audience: enterprises and developers.

The move is a stark reversal from Perplexity’s previous strategy, in which CEO Aravind Srinivas said on a podcast last year that advertising will become its core stream of revenue over subscription and enterprise “if we crack it.” However, ads could have gone either way for the company:

• Given that Perplexity’s flagship product is an AI-powered search engine, leaning into advertising would have made sense, since ads are how Google makes its billions.
• Still, where other ads-based businesses have Perplexity beat is on user numbers, with the AI search tool sporting roughly 60 million users compared to ChatGPT’s 800 million weekly active users, according to WIRED.

Perplexity doesn’t seem too worried about following in Google’s footsteps, telling reporters in the press briefing that “Google is changing to be like Perplexity more than Perplexity is trying to take on Google.”

Our Deeper View

There might be a reason attendees at the Cerebral Valley conference voted Perplexity a flop risk back in November: The startup does not have an easy road ahead of it to grow revenue. Though enterprise tech is generally a more lucrative bet than consumer, the startup has Anthropic to contend with, and its Claude Code and Cowork products have seen massive uptake in enterprise and developer circles due to their focus on trust and responsible AI. And among consumers, getting users to latch onto anything but its free tier is a hard sell, with Google providing its own AI search features and ChatGPT cementing itself as a household name. Perplexity will need to become known for something distinct in order to succeed.