In a significant move to bolster its presence in the AI search engine market, Perplexity has announced a strategic partnership with SoftBank, which includes its mobile operations Y!mobile and LINEMO. Starting June 19, 2024, these carriers will offer a free, one-year subscription to Perplexity Pro, the premium tier of Perplexity’s AI-driven search engine.

Expanding Reach and User Engagement

The partnership underscores Perplexity’s international expansion ambitions and its strategy to increase revenue from its paid services. By collaborating with SoftBank, Perplexity aims to tap into the Japanese market, leveraging SoftBank’s vast customer base to enhance its user base and data touchpoints.

For SoftBank, the deal represents an opportunity to attract more users interested in advanced AI technologies without the need for significant in-house investment in AI development. By offering Perplexity Pro as a free benefit, SoftBank hopes to draw more customers to its mobile services, simultaneously increasing its revenue streams.

Similar International Ventures

SoftBank is not the only telecommunications giant partnering with Perplexity. In April 2024, Perplexity also inked a deal with Germany’s Deutsche Telekom. This parallel agreement reflects a broader strategy by Perplexity to form alliances with major mobile carriers to boost its premium user base globally.

While the financial specifics of these deals remain unclear, they highlight SoftBank’s growing focus on AI. The company’s Vision Fund has shown interest in various AI startups, including notable names like OpenAI and Mistral, though it has yet to finalize investments in these companies. Additionally, Masayoshi Son, SoftBank Group’s founder and CEO, has ambitious plans to establish a $100 billion AI chip venture and has been linked to potential acquisitions, including the UK’s Graphcore.

SoftBank’s AI Ambitions

SoftBank’s commitment to AI extends beyond these partnerships. Last year, the company launched SB Intuitions, a Japanese-language Large Language Model (LLM) venture. Although the progress of SB Intuitions remains uncertain amid competition from other advanced LLM developers, it reflects SoftBank’s dedication to being a leader in AI innovations.

With the Perplexity Pro tier, users gain access to the latest LLMs for enhanced search query capabilities. This feature allows users to select preferred models, ensuring more precise and comprehensive search results. This flexibility is a key selling point as it caters to diverse user needs and preferences.

Financial Milestones and Future Prospects

Perplexity, headquartered in San Francisco, closed a $62.7 million funding round in April 2024, doubling its valuation to $1 billion from just three months prior. The company is currently raising an additional $250 million, aiming for a valuation between $2.5 billion and $3 billion. Perplexity’s investors include Bezos Expeditions, IVP, NEA, Sequoia, Nvidia, and Databricks, alongside other prominent individuals.

Perplexity’s AI search engine, available via web browsers and applications, delivers answers based on the latest web searches. The service has faced criticism from publishers over content crediting practices, prompting the startup to explore revenue-sharing agreements.

Features of Perplexity Pro

Perplexity Pro offers several advanced features, such as the ability to choose from the latest LLMs for more detailed and accurate search results. It also includes tools for generating high-quality images in various styles based on user search histories. Additionally, Perplexity Pro offers an AI profile feature that customizes search results and supports users through chat-based tools.

The iOS version of Perplexity Pro is priced at 3,000 yen per month or 30,000 yen per year. The web version costs $20 per month or $200 per year.

Conclusion

From my perspective, the partnership between Perplexity and SoftBank is a strategic win-win, potentially transforming the AI search landscape while providing valuable benefits to both companies. Perplexity gains a significant user base expansion in Japan, while SoftBank enhances its service offerings with cutting-edge AI technology. As the AI industry continues to grow, such collaborations will likely become more common, driving innovation and competition in the sector.