Perplexity pivots away from ads as AI ad war heats up and OpenAI tests monetization

AI search startup Perplexity is distancing itself from ads, fearing that users won’t trust chatbots with an upsell program. The move highlights an emerging crossroads for the AI ​​industry, as the sector’s biggest players seek stable revenue streams to fund massive spending, with giants like OpenAI turning to advertising and others like Anthropic promising to keep them out.

“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 at the moment,” an anonymous executive was quoted as saying by the newspaper. FT. Instead, the company will focus on producing something that consumers are “willing to pay for,” particularly business customers and high-end users like financial professionals, lawyers, doctors, and CEOs.

Another executive did not rule out a return to advertising in the future, but said serving ads was “misaligned with what users want” and may not be necessary for the company to thrive. “We are in the business of accuracy, and our business delivers the truth, the right answers,” they said.

This pivot places Perplexity firmly on the anti-ad side of the emerging industry divide over how AI should make money. Some, like Perplexity, hope subscriptions will be sufficient, and Anthropic has committed to keeping its chatbot Claude ad-free. Others, like OpenAI, have embraced advertising, and last week the company began testing advertising for free ChatGPT users. The dispute has also spilled into the public arena, with Anthropic’s airing of attack ads clearly targeting ChatGPT during the Super Bowl, which OpenAI CEO Sam Altman called “disingenuous.”