Perplexity's Retreat from Ads Signals a Bigger Strategic Shift

4 days ago

Perplexity is abandoning plans to include ads in its AI search product to maintain user trust.
The company is shifting focus to subscription-based revenue, targeting developers, enterprises, and paying consumers.
Perplexity will prioritize partnerships with device-makers and position itself as an orchestration layer for AI models from OpenAI, Google, and Anthropic.
Early growth expectations were not met, with current user numbers significantly lower than competitors like ChatGPT and Gemini.
Perplexity's Comet browser saw a decline in weekly active users, dropping from 7.8 million to 2.8 million in December 2025.
The company is making hundreds of millions in revenue, mainly from subscriptions, and expects future growth from enterprise sales.
Perplexity plans to hold its first developer conference in 2026 to expand its role in powering other AI services.
Despite pulling back from ads, Perplexity will maintain its free tier, supported by partnerships like the one with Motorola.
Google's AI Mode resembles Perplexity's original product, and Apple and Meta previously showed acquisition interest.

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