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Perplexity is in talks to raise again, as the battle for second in the AI chatbot race heats up

The latest funding round could peg Perplexity at a $14 billion valuation.

5/14/25 6:56AM

Like a lot of AI startups, Perplexity isn’t having a hard time finding new investors.

According to exclusive reporting by The Wall Street Journal, the company is in closing talks for a new $500 million funding round that would see it valued at a whopping $14 billion. For context on just how quickly valuations are still soaring in the AI sphere, Perplexity closed a funding round in November that saw its valuation reach $9 billion… which was already triple what the startup was worth just six months before that.

Though it’s certainly had its critics, the company’s eponymous AI search engine has proved popular since its release in late 2022, while plans to launch Comet — an AI-powered browser that could land as soon as this month — clearly have investors excited as well. In the ever-expanding universe of AI tools and chatbots, though, OpenAI’s star still shines brightest.

ChatGPT domination chart — Sherwood News

ChatGPT has been breaking its own traffic records every month of the year so far, hitting an almighty 780 million visits from American users in April, while web-based versions of other AI efforts have yet to build anywhere near as much steam. Indeed, discounting rivals from Big Tech giants like Meta’s new MetaAI platform or Google’s Gemini, ChatGPT really is a deus amid machinas, clocking over 8.5x more April site visits than the web versions of DeepSeek, Perplexity, Anthropic’s Claude, and Elon Musk’s Grok combined.

Among those chatbots and AI search engines not set up by Sam Altman or trillion-dollar tech companies, DeepSeek — the Chinese startup whose R1 model rocked AI stocks in January — leads the way, though it has lost momentum more recently.

AI platform visits chart — Sherwood News

Since DeepSeek burst onto the scene, causing a flurry of hurried explainers and inspiring a wave of online evangelists, tens of millions have flocked to sample the chatbot, reportedly built at a fraction of the cost of OpenAI’s flagship model. Still, monthly visit numbers are slipping from the February peak of 43 million.

Jon Keegan3h

FT: Meta considering “tens of billions” in new capital to fund AI

Just days after Google announced a monster $85 billion upsized equity raise, the extremely profitable Meta is seeking to sell “tens of billions of dollars” in stock, according to a new report from the Financial Times.

Meta is planning on spending between $125 billion and $145 billion on AI capital expenditure this year alone.

Shares dropped more than 5% on the news.

Meta weighs big equity raising after blockbuster Google deal

Rani Molla

Meta is supercharging its subscription businesses

The free-app giant never really cared about recurring revenue. Now, it’s launching paid plans for all sorts of stuff.

Jon Keegan9h

FT: Anthropic staff helping the NSA use Mythos for offensive cyberattacks

Anthropic’s Mythos AI model was deemed too dangerous to release to the public, with the company citing its ability to orchestrate novel cyberattacks.

And that’s just what the National Security Agency is doing, with the help of Anthropic staff embedded at the agency, according to a report from the Financial Times.

Only a small number of companies and US allies have been given access to the advanced model, which means America’s adversaries have not had the chance to shore up their defenses against the AI model’s new offensive capabilities.

The arrangement is especially unusual as the Pentagon has deemed Anthropic’s AI a national security supply chain risk — effectively blacklisting it for defense work — in response to the company’s refusal to allow its technology to be used for any legal application, which could include autonomous killing or mass surveillance. Anthropic is currently suing the US government to fight the determination.

US National Security Agency using Anthropic’s Mythos for cyber attacks

Rani Molla10h

Longtime Tesla bear JPMorgan upgraded Tesla and raised its price target to $475 from $145

For more than a decade, JPMorgan was Wall Street’s most stubborn Tesla skeptic, anchored by auto analyst Ryan Brinkman’s strict focus on traditional car fundamentals and near-term delivery numbers.

But JPM recently handed coverage of the stock to a new analyst, Rajat Gupta, who is throwing that playbook out the window. In a note Friday, the firm upgraded Tesla to “neutral” from “underweight” and raised its price target 228% to $475 from $145. (The analyst consensus on FactSet is $403.) Instead of focusing on the company’s struggling vehicle business, the new analyst is orienting himself more toward Tesla’s idea of the future, now modeling Tesla’s physical AI and robotaxi fleets all the way out to the year 2040.

Here are the main reasons for the capitulation:

Looking past the car lot: Gupta argues that Tesla “is at the forefront of physical AI, entering uncharted TAMs” and therefore “deserves the benefit of the doubt to be valued on LT earnings potential” rather than near-term speed bumps.
Unmatched vertical integration: Tesla’s control over everything from battery cells to custom silicon gives it a massive moat. JPM notes this starting point advantage is “unmatched at an industrial level scale” and “still somewhat under-appreciated and misunderstood.”
The AWS flywheel effect: Deploying Optimus robots inside its own factories “should not only lower COGS for the base automotive business, but more importantly, help validate the product at an industrial scale.” Gupta called it “a classic flywheel effect, somewhat analogous to AWS and Kiva at AMZN.”

For Tesla bulls who have argued for years that this is an AI company and not a carmaker, JPM’s sudden $3.9 trillion valuation model is the ultimate validation.

Anthropic ponders self-improving AI

Anthropic says Claude already writes 80% of its code. A new post asks what happens when the models can improve themselves — and whether anyone could stop them.

Jon Keegan10h