After announcing a strategic partnership with SoftBank in April, Perplexity AI, the AI search engine with ambitions to challenge Google, is leveraging this deal to grow its user base and data touchpoints in Japan. Starting June 19, SoftBank and its mobile operations, Y!mobile and LINEMO, will offer free, one-year subscriptions to Perplexity’s premium tier, Perplexity Pro.
Strategic International Expansion
This initiative underscores Perplexity’s international ambitions and its strategy to generate revenue from its paid tier. It also highlights the motivations of mobile carriers like SoftBank to attract users interested in AI without having to build their own AI models and services. By partnering with AI companies, carriers can potentially increase their customer base and revenues while exploring collaborative opportunities for future AI-driven services.
Other Partnerships and AI Focus
Perplexity is not solely partnering with SoftBank. The startup has also secured a partnership with Germany’s Deutsche Telekom, announced simultaneously with the SoftBank deal in April 2024. It is unclear whether either carrier is investing directly in Perplexity through these deals, but SoftBank has been actively focusing on AI.
SoftBank’s Vision Fund has shown interest in various AI startups, and Masayoshi Son, the founder and CEO of SoftBank, is working on a $100 billion AI chip venture. Additionally, SoftBank has been linked as a potential buyer for the UK-based AI chip company Graphcore and has launched its own Japanese-language Large Language Model venture, SB Intuitions, to further its AI ambitions.
Perplexity’s Features and Funding
Perplexity Pro allows users to choose from the latest large language models (LLMs) to enhance their search queries. This subscription service offers advanced features, including high-quality image generation based on search histories and a chat-based AI profile that customizes search results. The service is available in web browsers and applications, and Perplexity is working on revenue-sharing deals to address concerns from publishers about crediting work in answers.
The iOS version of Perplexity Pro is priced at 3,000 yen per month and 30,000 yen per year, while the web version costs $20 per month and $200 per year.
In April, Perplexity closed a $62.7 million funding round, doubling its valuation to $1 billion within three months. The company is currently raising additional capital, aiming for at least $250 million by 2025. Information about the latest round will be provided soon.
Investors in this round include Masayoshi Son (SoftBank), Vikram Pandit (Flipkart Group), Jeff Bezos (Amazon), John Doerr, and Steve Chen (both leaders of SequOia Capital). Other notable investors include Narendra Modi (Nvidia), Sunder Parks (Nvidia), and Rahul Mistry.
Revenue Strategy and User Base Expansion
The company has been aggressive in its marketing, emphasizing the need to expand its user base through partnerships with global tech companies like SoftBank, Deutsche Telekom, and Graphcore. By leveraging these partnerships, Perplexity aims to establish itself as a major player in the AI search engine market, competing directly with Google and other established players in the space.
Summary
The partnership with SoftBank is part of Perplexity’s broader strategy to expand its influence globally, particularly in Japan. By offering free trials of Perplexity Pro, the company hopes to attract a significant user base while generating revenue from its premium subscription tiers. With strong backing from visionary investors and active exploration of AI-driven opportunities, Perplexity is well-positioned to challenge established players in the market.
This international expansion effort will help Perplexity solidify its position as a leader in the AI search engine market, with a focus on user-centric innovation and competitive pricing strategies.
