SoftBank to invest in Perplexity: Here's what you need to know
Time SoftBank reportedly investing in the AI search startup Perplexity at a $3 billion valuation. A Deirdre boss is digging into that for Tech Check today. Did you told us last week SoftBank was going to start getting more active? Masayoshi Son is on the hunt, so it wouldn't come as a surprise. And really, this is another data point in the red hot funding landscape for Gen. AI companies. You've got struggling ones like Stability AI. They're finding rescue lines and then darlings like Perplexity raising money at ever higher valuations. Both of them have strong user bases that investors see as compelling. All while Open AI continues to prove that scrappy startups can partner and increasingly compete with mega caps. Now, a source familiar tells me that SoftBank is looking to participate in Perplexity's latest round, which will value the startup at $3 billion, up from just a billion dollars a few months ago. Bloomberg first reported the details. The startup, though it's less than two years old, and it's already built a strong and loyal following among tech and business leaders. More recently, though, it's faced scrutiny over a product that summarizes news stories, and it's been accused of scraping content from the web. Another buzzy Gen. AI startup, Stability AI, which has struggled with executive turnover and mounting costs, was earlier this week able to find a lifeline from a group of investors, including ex Facebook executive Sean Parker and Co to management. That's a crossover fund that, like SoftBank, many traditional VC investors consider to be Silicon Valley outsiders that come in at later stages to inflate valuations. Now, in venture, it's always the promise of one big payoff that will make up for all the other bets. Now, Open AI is really the north star for the opportunity and generative AI partnerships with Microsoft and Apple and increasingly competing with mega caps. There's an information report this morning, guys, that was fascinating. It says that Open AI is now selling more of its AI models than Microsoft is. Again, this web becomes so tangled and now you have these darlings able to compete with the mega caps. It's really an open field here for this new platform shift. It was kind of cool this morning, Dee, to listen to Andrew talk to Brian Chesky about what AI is going to be. It's not necessarily goggles or even chat bots, but almost like physical space that you would move into and experience. It's very heady. Yeah. And you know, Brian Chesky has been really thoughtful. And some might say Airbnb has been a little bit slower to show off sort of AI features. But he's always says that he doesn't just want to add them on for the novelty of it. He wants. He's thinking really deeply about it. Lester Holtz conversation with him and Sam Altman last night at the Aspen Ideas Festival. That was fascinating to hear both of them together because they've kind of grown up in Silicon Valley together with Y Combinator. That was where Airbnb first got funding and now both of them really important voices on generative AI. And Altman, I mean, just incredible what he's been able to do. And if open AI is really scoring these kinds of enterprise deals that have been Microsoft's bread and butter, it's going to be an interesting race. Even though Waldman said it wasn't a race, it's hard to see it as anything else. They've also been leaving on making deals with publishers. I just saw today Time magazine announced a multi year content deal and strategic partnerships with so that Open AI gets access to all the historic time information. Because you brought up perplexity and it's been kind of a contentious subject, right? That any relationship or lack thereof with publishers and being accused of plagiarism. So is Open AI charting the path here? It seems that they are, as you said, they've sort of signed more deals with publishers than anyone else. And I've asked this question of Google's Gemini as well. Why aren't they set signing as many deals? And it's really important, right, for the companies that are building these models and the companies that are more rappers for these models like Perplexity. Perplexity doesn't actually build the large language models, but it does, you know, use all of these models and look increasingly look at websites to build generative AI products. So this is one of the most, you know, interesting and contentious debates and generative AI as well. And your model is only as good as the data, whether it's credible or not behind it, right? And there's a difference between what you get from Reddit and what you get from more traditional media sources. All right, Deirdre, thank you, Deirdre Bose. Plenty of aspects there in the AI future. Look ahead to Nike after the bell coming up after the break. Stay with us.