Perplexity is making its biggest talent grab yet, acquiring the entire team behind Sequoia-backed AI design startup Visual Electric to lead a new Agent Experiences division. The move signals Perplexity's ambitious push beyond search into AI agents that can actually create and design, not just answer questions.
The AI search wars just took a creative turn. Perplexity announced it's acquiring the team behind Visual Electric, the Sequoia Capital-backed AI design startup, in a move that signals the company's expansion beyond search into full-blown AI agents. CEO Aravind Srinivas confirmed the acquisition on X, though deal terms remain undisclosed. The Visual Electric team will lead Perplexity's new Agent Experiences group, a strategic pivot that puts the company in direct competition with OpenAI's GPT-4 vision capabilities and Google's multimodal AI efforts. Visual Electric wasn't just another AI image generator. Founded in 2022 by former Meta, Apple, and Microsoft engineers Colin Dunn, Adam Menges, and Zach Stiggelbout, the startup built something different - an infinite canvas where designers could ideate, create, and iterate with AI as their creative partner. The tool let users generate images and apply edits in a whiteboard-style interface, later adding video generation capabilities that caught Sequoia's attention for a $2.5 million funding round alongside BoxGroup and Designer Fund. But here's where it gets interesting: Perplexity isn't just buying talent, it's buying a vision of how AI agents should work in creative workflows. While competitors focus on chat-based interactions, Visual Electric proved AI could integrate seamlessly into professional design processes. That experience becomes crucial as Perplexity builds agents that don't just search and summarize, but actually create and produce. The timing couldn't be better. As OpenAI races to launch more sophisticated AI agents and Google integrates creative tools across its workspace suite, Perplexity needs to differentiate beyond pure search. The Visual Electric acquisition gives them immediate credibility in the creative AI space and a team that understands how professionals actually want to work with AI. For Visual Electric users, the transition means saying goodbye to a beloved tool. The company announced it will shut down Visual Electric as a standalone product within 90 days, offering data exports and prorated refunds to subscribers. It's the classic startup acquisition playbook - absorb the talent, kill the product, integrate the IP. The move also reveals Perplexity's broader strategy. Rather than competing head-to-head with and on general search, the company seems to be betting on specialized AI agents that can handle complex, multi-step creative workflows. Think less 'search engine' and more 'AI creative director.' Industry insiders see this as Perplexity's response to increasing pressure from well-funded competitors. While the company has gained traction with its conversational search approach, it needs new revenue streams and user engagement models to justify its growing valuation. AI agents that can actually produce work - not just find information - represent a much larger market opportunity. The acquisition timing also coincides with broader industry consolidation in the AI space. As funding becomes more selective and the race for AI dominance intensifies, smaller specialized startups like Visual Electric face pressure to either scale rapidly or find strategic buyers. For Visual Electric's Sequoia backers, this exit likely represents a solid return on their $2.5 million investment, even if the specific terms weren't disclosed.