Perplexity is backing away from advertising as the AI industry faces a crucial fork in the road over monetization. The AI search startup quietly phased out ads late last year and isn't pursuing new ad deals, executives confirmed Monday at a roundtable event. The pivot throws the company's lot in with Anthropic's ad-free stance while OpenAI charges ahead with advertising plans, exposing a fundamental divide over whether users will trust AI chatbots with a commercial agenda.
Perplexity just picked a side in what's shaping up to be the AI industry's defining business model battle. The company phased out advertising late last year and isn't exploring any new ad partnerships, executives revealed Monday at a media roundtable, according to reports from Business Insider and the Financial Times. It's a complete reversal for the startup that once seemed ready to follow the traditional search playbook.
The timing couldn't be more telling. While OpenAI pushes deeper into advertising as a revenue stream for ChatGPT, and Anthropic doubles down on its promise to stay ad-free, Perplexity is casting its vote for the subscription model. The split reveals a fundamental tension in AI: can users trust an AI assistant that's being paid to recommend certain products or services?
That trust problem is exactly what's driving companies apart. When you're asking an AI to help you make decisions - from what laptop to buy to which medical treatment to pursue - any hint of commercial influence becomes poisonous. Search engines got away with it because users understood they were seeing ads alongside organic results. But AI chatbots present a single, authoritative-sounding answer. If that answer is shaped by advertiser dollars, the whole value proposition collapses.
Perplexity's retreat from advertising marks a significant shift for a company that's positioned itself as a direct challenger to Google's search dominance. The startup raised substantial funding at a reported multi-billion dollar valuation, fueled partly by the promise of capturing some of the massive search advertising market. Now it's betting that subscription revenue can support the enormous computational costs of running AI search at scale.
