Perplexity’s Strategic Pivot Away From Advertising

Perplexity, a generative‑AI search startup, is actively reducing its reliance on advertising. The company began phasing out ads late last year and says it is not pursuing new ad deals at this time, according to statements made at a roundtable event reported by Business Insider and the Financial Times.

Executives emphasized that showing ads could cause users to doubt the credibility of the chatbot’s answers. One unnamed executive noted, “The challenge with ads is that a user would just start doubting everything… which is why we don’t see it as a fruitful thing to focus on right now.”

Focus on Paid Subscriptions and Professional Users

Instead of ads, Perplexity plans to generate revenue by offering services that consumers are “willing to pay for.” The company is targeting business customers and high‑powered users, including finance professionals, lawyers, doctors, and CEOs. An executive explained that the firm is “in the accuracy business, and the business is giving the truth, the right answers.”

While the company does not rule out a future return to advertising, it described ads as “misaligned with what the users want” and suggested they may not be necessary for Perplexity’s success.

Position Within the AI Industry’s Revenue Debate

Perplexity’s move places it on the anti‑ad side of a broader industry debate over how generative‑AI companies should monetize their products. Some competitors, such as Anthropic, have pledged to keep their chatbot Claude ad‑free, whereas OpenAI has embraced advertising, recently testing ads for free ChatGPT users. The rivalry has even entered the public arena: Anthropic aired attack ads aimed at ChatGPT during the Super Bowl, which OpenAI CEO Sam Altman described as “dishonest.”

By prioritizing subscription revenue and accuracy, Perplexity hopes to build a sustainable business model without compromising user trust.

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