Google's Most Serious Rival Is a Start-Up

The AI boom of the past two years has largely been a two-horse race.

- PARMY OLSON Bloomberg

Alphabet's Google and Microsoft-funded OpenAI have duked it out for customers, while Amazon.com and Meta Platforms have nibbled at the margins for market share. But at least one new company has emerged as an outsider with a chance of challenging their oligopoly.

More than 15 million people, according to a spokeswoman, are regularly using Perplexity AI, an "answer engine" that competes with Google's search and advertising business. The website and app shot up in value over the course of 2024, from $1 billion at the start of the year to $9 billion in December when it closed a $500-million funding round. Its founder, Aravind Srinivas, is a consummate negotiator who has plugged himself deeply into Silicon Valley's network while diffusing tension with competitors and critics.

Going up against Google has always looked like a suicide mission. Around 90% of online searches globally are conducted on its site. Microsoft's Bing, after incorporating ChatGPT two years ago, has barely made a dent in Google's market share, remaining at just 4%. Yahoo's usage has dwindled. A promising AI start-up called Neeva, run by a former Google ad executive, closed down in 2023 after four years of trying to compete with Google.