Perplexity ditches ads – over concerns about user trust
The AI startup Perplexity has stopped running ads on its platform. The company fears that advertisements could undermine user trust, according to the Financial Times. Perplexity was one of the first GenAI companies in 2024 to experiment with sponsored answers beneath chatbot results. However, at the end of last year, the San Francisco-based company began gradually removing the ads.
The decision stands in contrast to competitor OpenAI, which has recently integrated sponsored links in ChatGPT to generate advertising revenue. ChatGPT charges 60 US dollars per 1,000 ad impressions (CPM). That’s three times what Meta currently charges.
“A user needs to believe this is the best possible answer in order to continue using the product and be willing to pay for it,” a Perplexity manager told FT. Although the ads were labeled and, according to the company, had no influence on the chatbot’s answers, management sees a fundamental problem: “The challenge with advertising is that a user would simply start to doubt everything.” For this reason, Perplexity no longer views advertising as a “fruitful thing” – while ChatGPT is just getting started.
OpenAI bets on ads, Anthropic refuses
While Perplexity retreats, OpenAI is introducing ads in ChatGPT for users without a paid subscription – labeled ads appear beneath the answers there. The company emphasizes that ChatGPT’s answers are not influenced by sponsors. Tech giant Google does have ads in AI Mode and in its AI Overviews in the classic search function, but currently keeps its Gemini chatbot explicitly ad-free. Anthropic also spoke out against ads in its Claude chatbot this month – and even ran a Super Bowl ad with the message: “Advertising is coming to AI, but not to Claude.”
18-billion valuation through subscriptions
Perplexity is valued at 18 billion dollars and generates 200 million dollars in annualized revenue according to company figures – the vast majority comes from subscriptions. The company offers free services as well as paid tiers ranging from 20 to 200 dollars per month. The platform counts more than 100 million users according to its own statements.
Perplexity was also one of the first companies to introduce shopping features – followed by Google and OpenAI. Unlike the competition, however, Perplexity doesn’t earn anything from this feature and takes no cut of sales.
“We’re in the accuracy business, and the business is about delivering the truth, the right answers,” another Perplexity manager summarizes the company’s priorities. Although the company doesn’t categorically rule out advertising in the future, the model is currently “not in line with what users want.” Perplexity hopes to stick with this approach.
