Perplexity Drops Ad Plans, Pivots to Subscriptions and Enterprise in Crowded AI Market
Summary
Perplexity abandons its advertising strategy and pivots to subscriptions and enterprise deals, betting that ad-free AI search will build consumer trust — but the startup faces fierce competition from Google, ChatGPT, and Anthropic as it fights for a foothold in an increasingly crowded market.
Key Points
- Perplexity is abandoning its advertising plans and shifting focus to its subscription business, planning to fund its free tier through partnerships with device makers instead of ads.
- The strategic reversal comes as Perplexity fears ads could erode consumer trust, with the company now targeting enterprises and developers — a space currently dominated by Anthropic and its widely adopted Claude products.
- Perplexity faces a steep uphill battle for revenue growth, competing against Google's built-in AI search, ChatGPT's 800 million weekly active users, and Anthropic's strong enterprise foothold, leaving the startup needing a distinct identity to survive.