What SoftBank Sees in a Multimillion Perplexity Investment
The Gen AI startup that touts itself as ‘the most powerful way to search the internet’ could soon see it become one of the most popular too as banking giant SoftBank is reportedly set to invest up to US$20m into it.
This investment is part of a larger US$250m funding round, Bloomberg reported, and should it go through, forms part of a US$3bn valuation of the US-based Perplexity AI.
This builds exponentially on the US$500m valuation the startup received just at the beginning of the year.
Although the deal hasn't been finalised and its terms could still change, the move represents both SoftBank’s AI ambitions and how it sees Perplexity's place in that
Why Perplexity?
Perplexity AI is a Gen AI chatbot platform, much like ChatGPT, and even uses popular AI models such as Meta’s open-source Llama and OpenAI’s GPT-4.
However, the startup has managed to stand out from the influx of other AI companies due to its commitment to providing real-time information.
It has built-in abilities that enable users to get answers to queries with sources and citations by utilising RAG and a variety of large language models (LLMs) to generate information.
This can then be provided via real-time results in text format instead of links.
Currently, Google’s Gemini is the only other major player in the Gen AI chatbot market that offers something similar.
Therefore, this investment by the Japanese banking giant alludes to the fact that they are betting on the other horse in this AI race.
SoftBank’s AI ambitions
This investment into perplexity would be through SoftBank’s Vision 2 Fund. The fund, founded in 2019, is a self-funded investment vehicle with a portfolio of investment in companies that tally to excess of US$56bn.
Unlike its predecessor, Vision Fund 2 lacks external investors, relying solely on SoftBank's capital and beliefs in what will be good bets for the future.
And what is the fund’s main focus? AI. SoftBank has made significant strides in AI investments, reflecting Chairman and CEO Masayoshi Son's vision of achieving artificial super intelligence (ASI).
Vision Fund 2 regularly makes hundreds of dollars of investments in AI-based technologies, with plans to push nearly US$9bn into AI investments.
Notable investments include a US$200m investment in Tempus AI in January of this year.
The fund also targets AI-adjacent sectors such as data centres and power generation.
With over 250 companies in its portfolio, Vision Fund 2 exemplifies SoftBank's commitment to supporting a full-stack AI technology ecosystem, positioning itself as one of the players leading the AI race.
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