Embarrassment means abandonment plans to place ads on its AI-powered search engine as the industry looks for sustainable business models that won’t damage user trust. The changes are part of a larger strategic shift for the company, which has long focused on disrupting Google’s search business.
“Google is changing to be more like Perplexity than it is trying to be like Google,” a Perplexity executive said Tuesday at a press conference. Management spoke to the press on condition of anonymity.
Instead of chasing mass adoption, Perplexity will focus on its subscription business, focusing on becoming the most right AI service for developers, enterprises and consumers willing to pay a monthly fee. The company also plans to make partnerships with device manufacturers a larger part of its business in the future.
The move marks a major shift for the company, which was one of the first artificial intelligence companies to start experimenting with advertising in 2024. CEO Aravind Srinivas said in podcast this year predicted that advertising would ultimately become the company’s main monetization driver. “I think we could really make money with advertising,” he added.
Now executives say they are changing course because the ads may make them wary of Perplexity’s response. Anthropic offered similar ones explanation for not including ads in his chatbot, Claude, and making fun of ChatGPT’s ads in a Super Bowl commercial earlier this month.
However, there may be other reasons why Perplexity does not advertise.
Early investors in Perplexity once believed the startup could reach hundreds of millions or even billions of users, but the startup’s growth has fallen tiny of expectations, according to a source close to the company. When the startup raised Series B funding in 2024, board member and investor Cack Wilhelm said in: blog entry that Perplexity “was able to bring the power of artificial intelligence to billions.” Two years later, that goal still seems distant.
Data from independent analytics firm Likeweb suggests Perplexity had just over 60 million monthly vigorous users on its website and mobile app in January. According to Likeweb, that’s more than double the number of users Perplexity had last year. Users now also access Perplexity through the AI-powered Comet browser, which is not tracked by Likeweb.
A source close to Perplexity says the Comet browser agent reached 2.8 million weekly vigorous users (who are also Perplexity subscribers) in December 2025, down from a peak of 7.8 million WAUs earlier in the year.
Excluding Comet, Perplexity’s user base on the web and mobile devices is less than 10 percent of the total users of Google’s ChatGPT OpenAI and Gemini, which have 800 million weekly vigorous users and 750 million monthly vigorous users, respectively.
“One of the things that is starting to become clear to us is that Perplexity is not for everyone,” another Perplexity executive told the press.
Advertising is a powerful business for companies like Google and Meta because they have hundreds of millions of free users. Without this scale, advertising will likely become a less attractive business model.
Perplexity says it has hundreds of millions of dollars in revenue, mostly from consumer subscriptions, but increasingly expects growth to come from enterprise sales.
The AI search startup appears to be making a more concerted bet on powering other AI services in 2026, with plans to host its first developer conference later this year. The company’s idea is that Perplexity can be an orchestration layer on top of AI models from OpenAI, Google and Anthropic, directing user queries to the best model for a given question.
Perplexity said it has no plans to get rid of the free tier at this time, despite phasing out advertising. One way the company hopes to continue offering products to free users is through partnerships like the one it has with Motorola, in which Perplexity comes pre-installed on consumer devices. Executives hinted that more partnerships with device makers could be on the horizon.