(Bloomberg) -- Perplexity AI is launching revenue-sharing partnerships with several major publishers less than two months after some news outlets publicly accused the artificial intelligence startup of plagiarizing their stories.
Perplexity, which offers an AI search engine to compete with Alphabet Inc.’s Google, announced Tuesday that it has struck deals with Time, Fortune, WordPress.com-owner Automattic and several other media companies. Publishers will receive a “double digit” percentage of revenue from sponsored questions that appear below results in the search app, Perplexity’s Chief Business Officer Dmitry Shevelenko told Bloomberg News. Perplexity doesn’t currently have advertising in its core product, but the startup plans to introduce it in the coming months.
Founded in 2022, Perplexity has quickly grown from a small upstart to one of the most closely watched AI startups. The company, which is in talks to raise funding at a $3 billion valuation, gained popularity by offering a more real-time and research-focused set of responses to user queries than rival chatbots. But in recent weeks, Perplexity has been accused of plagiarism by news organizations such as Forbes and Condé Nast, the latter of which reportedly sent a cease and desist letter to the startup. Perplexity has disputed the allegations.
The startup’s leadership points to the new deals as a sign of its commitment to supporting quality journalism, and said that the company is incorporating feedback around web scraping and citing sources. In a statement, Perplexity Chief Executive Officer Aravind Srinivas said: “We structured this program to ensure we have a scalable and sustainable way to align incentives for all parties.”
Sonal Shah, CEO of nonprofit Texas Tribune, said she’s had frank discussions with the startup about the public criticism from the media industry in the leadup to agreeing to be part of the initial group of publishing partnerships.
“We’ve said, ‘We want you to treat media fairly.’ And I think we’ve had good answers from them,” she said. Given that the Texas Tribune’s content isn’t paywalled and the nonprofit’s newsroom’s goal is to reach a broader audience, she said the partnership approach made sense. “I think we want to help direct the way this might happen, as opposed to just having to fight it legally, which we can't afford to do anyway.”
Beyond facing scrutiny from publishers, Perplexity is also confronting heightened competition. OpenAI announced last week that it is releasing a standalone AI search engine, with plans to eventually integrate some of the functionality into its ChatGPT chatbot. OpenAI has also reached a number of agreements with publishers in recent months, but it has structured those deals differently than Perplexity. Rather than do a revenue split, OpenAI pays significant sums upfront to license content that it can display in its apps and also use to train its AI systems.
In the next few months, Perplexity will begin showing sponsored “related questions” at the bottom of certain queries from users. Brands will be able to pay to ask related follow-up questions. When Perplexity earns revenue from an interaction where a publisher’s content is referenced, that publisher will earn a cut. Perplexity also plans to start showing sponsored related videos to people’s search queries, Shevelenko said.
“Whether it’s a high-quality publisher that’s super established or an independent blogger, if we’re using your content as an input to generate an answer as a source, and we're monetizing that, we want to share that upside,” said Shevelenko.
Publishers can also tap into Perplexity’s technology to create a custom “answer engine” on their news sites for users to ask questions about articles. Employees at these media companies will also get free access to Perplexity’s developer tools and premium chatbot service for one year.
Shevelenko said it “certainly would have been easier” to make these deals without the backlash from some journalists over the use of their work. “An important nuance is the management of a lot of these publishers deeply appreciate the revenue-share approach,” he said.
The company said it hopes to announce a new batch of media partners in August, with the goal of having deals with 30 to 40 publishers by the end of the year.
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