Perplexity AI has enhanced its capabilities by acquiring the startup Carbon, which specializes in a comprehensive retrieval framework that connects external data sources to large language models.

This acquisition will allow Perplexity to integrate Carbon's data connectors into its technology stack, enabling its answer engine to access diverse information from internal databases, cloud storage, and document repositories.

The integration of retrieval-augmented generation (RAG) technology from Carbon aims to connect AI with external data sources such as Google Docs and Slack.

Perplexity AI's recent funding round, led by Institutional Venture Partners, raised $500 million, tripling its valuation to $9 billion within six months.

As of March 2024, Perplexity reported over 15 million active users and processed hundreds of millions of monthly queries, establishing revenue-sharing partnerships with publishers like Time and Fortune.

Founded in 2022, Perplexity differentiates itself by providing real-time information and an AI-first knowledge discovery engine, rather than just links like traditional search engines.

The company's subscription-based revenue model has seen annual revenues increase from $5 million in January to $35 million by August 2024, with plans to explore advertising partnerships.

Perplexity faces stiff competition from AI giants like OpenAI and Google, both of which are enhancing their search capabilities and targeting the enterprise search market.

The CEO of Perplexity, Aravind Srinivasan, revealed that the company processes over 100 million queries per week and aims to increase this to 100 million daily.

Perplexity has launched significant features, including 'Pages' for content publishing and 'Spaces' for searching internal files alongside web data, enhancing user engagement.

Derek Tu, co-founder of Carbon, noted that the startup evolved rapidly from initial concepts to a leading solution utilized by numerous generative AI companies.

Despite the influx of investments in AI, startups like Perplexity face legal challenges, including a lawsuit from News Corp regarding copyright infringement.