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Is Perplexity, as a business, sustainable? I'm skeptical of these "AI search is better than web search" claims. Not because it's not true, but because of how wi

Is Perplexity, as a business, sustainable? I'm skeptical of these "AI search is better than web search" claims. Not because it's not true, but because of how wildly subsidized these AI things are. Web search doesn't suck because it's an impossible problem, web search sucks because it has to be profitable, and the profitability comes from making it suck. That's not true today for AI tools, but it will be in a few years. What will stop AI tools from being sucked into the same ad-infested black hole once the free money runs out?

cmrdporcupine 1y ago
For this kind of thing I'm an LLM skeptic, but People said the same thing you're saying about Google in the late 90s, early 2000s before their IPO (and immediately afterwards). There was a sense in which people didn't really think search -- which seemed more like a public utility -- could ever be profitable. Yahoo and AltaVista and Excite blanketed theirs in ads and junk. The search itself was seen merely as a draw into a "portal." It's not inevitable that the same thing happen with services like Perplexity. But I do think things are going to get shaken up. It seems like Google agrees at some level, because they seem to have just given up.
- CodingJeebus 1y ago
  The big difference with Google monetizing in the 90’s is that they owned their platform, which gave them control to build out a search and ad network that scaled. Perplexity uses frontier models under the hood, it doesn’t own all core aspects of its platform. They’re extremely dependent on frontier models and therefore reliant on underlying model pricing remaining sustainable.
  - cmrdporcupine 1y ago
    Yeah I don't think Perplexity in particular is all that interesting. But these days I do do a lot of 'research phase' stuff right in Claude Code. If looking at a technical issue, etc. I'll give it URLs and terms to search for and let it do some research for me. Mixed results.
jeffisabelle 1y ago
> web search sucks because it has to be profitable, and the profitability comes from making it suck. That's not true today for AI tools, but it will be in a few years. Many people pay to use _AI tools_, that already brings in revenue. I had chatgpt plus since very early days, which was 20$/month, I don't have it at the moment because my company provides pro plan to me (and every other engineer) which is probably around 200$/month/user. Of course, serving a single inference on LLM's probably costs a lot more than a serving a single search on google, but they've already got a solid business model and they won't need intrusive adds _in a few years_ (if at all)
- coldpie 1y ago
  I'm skeptical that a significant number of people will be willing to pay cash money for these products when web search still exists for free, but we'll see!
spopejoy 1y ago
Perplexity's CEO openly admits that their Comet browser offering is intended to track users for ads. So it seems they will head down the encrapify path soon enough. Pro tip: get a free account and don't go pro. Their free account is bananas good atm "while supplies last"

cmrdporcupine 1y ago

For this kind of thing I'm an LLM skeptic, but People said the same thing you're saying about Google in the late 90s, early 2000s before their IPO (and immediately afterwards). There was a sense in which people didn't really think search -- which seemed more like a public utility -- could ever be profitable. Yahoo and AltaVista and Excite blanketed theirs in ads and junk. The search itself was seen merely as a draw into a "portal." It's not inevitable that the same thing happen with services like Perplexity. But I do think things are going to get shaken up. It seems like Google agrees at some level, because they seem to have just given up.

CodingJeebus 1y ago
The big difference with Google monetizing in the 90’s is that they owned their platform, which gave them control to build out a search and ad network that scaled. Perplexity uses frontier models under the hood, it doesn’t own all core aspects of its platform. They’re extremely dependent on frontier models and therefore reliant on underlying model pricing remaining sustainable.
- cmrdporcupine 1y ago
  Yeah I don't think Perplexity in particular is all that interesting. But these days I do do a lot of 'research phase' stuff right in Claude Code. If looking at a technical issue, etc. I'll give it URLs and terms to search for and let it do some research for me. Mixed results.

jeffisabelle 1y ago

> web search sucks because it has to be profitable, and the profitability comes from making it suck. That's not true today for AI tools, but it will be in a few years. Many people pay to use _AI tools_, that already brings in revenue. I had chatgpt plus since very early days, which was 20$/month, I don't have it at the moment because my company provides pro plan to me (and every other engineer) which is probably around 200$/month/user. Of course, serving a single inference on LLM's probably costs a lot more than a serving a single search on google, but they've already got a solid business model and they won't need intrusive adds _in a few years_ (if at all)

coldpie 1y ago
I'm skeptical that a significant number of people will be willing to pay cash money for these products when web search still exists for free, but we'll see!

spopejoy 1y ago

Perplexity's CEO openly admits that their Comet browser offering is intended to track users for ads. So it seems they will head down the encrapify path soon enough. Pro tip: get a free account and don't go pro. Their free account is bananas good atm "while supplies last"