Perplexity Pulling Sponsored Answers From AI Platform

Artificial intelligence (AI) startup Perplexity is reportedly moving away from advertising.

As the Financial Times (FT) reported late Tuesday (Feb. 17), the company was among the first AI firms to introduce ads, with sponsored answers appearing beneath its chatbot’s responses.

Now, executives at Perplexity say they have no plans to pursue further advertising after beginning to phase out the practice last year.

“A user needs to believe this is the best possible answer, to keep using the product and be willing to pay for it,” a Perplexity executive told the FT.

While the ads were labeled, and Perplexity said they had no bearing on the chatbot’s replies, the executive said that “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.”

As the report notes, Perplexity’s decision comes as other AI companies are turning to ads to earn revenue from free users and placate investors amid heaving spending.

Last week, OpenAI started testing ads on ChatGPT for non-subscribers. Like Perplexity, labeled ads appear below the company’s answers, and OpenAI has stressed that advertisers do not influence ChatGPT’s responses.

Google has ads in its AI mode and AI Overviews summaries on its search engine, but has yet to bring ads to its Gemini chatbot.

On the flip side, Anthropic recently committed to keeping its Claude chatbot ad-free, and even aired a Super Bowl commercial contrasting its ad philosophy with that of OpenAI.

The company has said that its business model is to drive revenue from enterprise contracts and subscriptions.

“This is a choice, and we respect that other AI companies might reasonably reach different conclusions,” Anthropic wrote on its blog.

Meanwhile, PYMNTS wrote recently about efforts by AI companies to advertise their services on social media and streaming to capture consumers’ attention.

“Hooking individuals first is key,” that report said. “People who use conversational and generative AI to build grocery lists, write songs and plan their days are the gateway to more profitable enterprise subscriptions by companies and organizations for workplace AI tools that can create decks, analyze supply chains and otherwise boost productivity and innovation.”

Recent PYMNTS Intelligence research shows that artificial intelligence adoption among consumers has reached a critical point: More than 60% of American adults used a dedicated AI platform last year at least once last year for everything from tracking their finances and health to learning and planning trips to shopping and writing.

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.