Perplexity AI Secures $500 Million Investment, Acquires RAG Startup Carbon
Perplexity AI, a rising competitor to OpenAI, has announced the closure of a $500 million funding round that values the company at $9 billion. The funding, led by Institutional Venture Partners, highlights growing investor interest in generative AI technology, with Perplexity AI emerging as one of the most valuable players in the sector.

Perplexity AI, a rising competitor to OpenAI, has announced the closure of a $500 million funding round that values the company at $9 billion. The funding, led by Institutional Venture Partners, highlights growing investor interest in generative AI technology, with Perplexity AI emerging as one of the most valuable players in the sector.
This latest round is the company’s fourth funding event this year, underscoring a rapid increase in valuation from $520 million at the beginning of 2024 to $3 billion by mid-year. The substantial investment indicates confidence in the potential of Perplexity AI, which differentiates itself through its real-time, AI-driven search capabilities. Unlike traditional search engines, the platform delivers conversational responses, similar to ChatGPT, by scouring the web for the most current information.
The announcement of the funding was followed closely by the news of the company’s acquisition of Carbon, a startup specializing in retrieval-augmented generation (RAG) technology. Carbon, officially known as JDCT Inc., connects AI systems to external data sources, enabling advanced search capabilities across platforms like Google Docs, Slack, and Notion. The acquisition is expected to bolster Perplexity AI’s premium offerings, which already include tools for searching internal files and accessing detailed financial data.
The integration of Carbon’s technology aims to enhance Perplexity AI’s ability to cater to enterprise users. As part of the deal, Carbon’s four employees will join Perplexity AI, bringing their expertise in RAG to help the company develop features that will allow users to search through internal databases, cloud storage, and other data repositories. These features are slated for release early next year.
In a blog post addressing the acquisition, Perplexity AI CEO Aravind Srinivason emphasized the importance of seamless data connectivity in daily workflows. “We believe your AI should be personal to you — at home, work, or on the go — and data connectivity is a key part of everyone’s daily workflows,” he stated.
The move to incorporate RAG technology signals Perplexity AI’s ambitions to compete in the growing enterprise search market. This area has drawn attention from industry leaders like OpenAI, which recently raised $6.6 billion and is rumored to be developing rival enterprise search solutions. Google and Microsoft are also investing heavily in conversational search tools, creating a competitive landscape for companies like Perplexity AI to navigate.
With more than 15 million active users as of March, Perplexity AI offers a subscription model that provides enhanced functionality for individual and business users. These features include financial tools for tracking stock prices and earnings reports, as well as the ability to search internal documents. The integration of Carbon’s technology is expected to extend these capabilities further, making the platform more appealing to enterprise clients.
Founded in 2022, Perplexity AI has swiftly established itself in the AI ecosystem, but the company faces mounting pressure from tech giants that are doubling down on their investments in generative AI. As competitors expand their capabilities, Perplexity AI’s ability to innovate and leverage its latest funding will be critical in maintaining its position in this dynamic and fast-evolving market.
By acquiring Carbon and strengthening its enterprise-oriented offerings, Perplexity AI appears poised to address the rising demand for AI-driven solutions that can enhance productivity and efficiency across both personal and professional domains.