Perplexity AI wrapping talks to raise $500 million at $14 billion valuation

Perplexity AI is in late-stage talks to raise $500 million at a $14 billion valuation, a source familiar with the situation confirmed to CNBC Monday.

Accel, the Palo Alto-based venture capital firm, will lead the round, according to the source, who spoke anonymously because the round is not yet finalized. The Wall Street Journal first reported on the late-stage numbers.

The funding is on the lower end of Perplexity's planned raise, which CNBC reported in March. During those early-stage talks, Perplexity was looking to raise between $500 million and $1 billion in funding at an $18 billion post-money valuation, per a source familiar.

The artificial intelligence search engine company competes against the likes of Google and Microsoft-backed OpenAI. Its valuation in December was $9 billion, triple its $3 billion valuation in June 2024.

Perplexity has just under $100 million in annual recurring revenue, or ARR, the source told CNBC in March.

Perplexity has been in the middle of the generative AI boom that began in late 2022 with the launch of OpenAI's ChatGPT, and it's betting big on its upcoming AI agent web browser, called Comet. But Perplexity faces increasing competition in the AI search market.

In March, Anthropic launched its web search product, allowing its chatbot Claude to display real-time search results to a subset of users.

Last fall, OpenAI launched a search feature within ChatGPT, its viral chatbot, that positioned it to better compete with Perplexity, as well as leading search engines such as Google and Microsoft's Bing.

Google has released AI Overviews within its search product as well, though it sparked controversy over high-profile errors soon after its release.