Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3: I'm Joe Wassenthal and I'm Tracy Alloway.
Speaker 2: Today you are going to be listening or watching a
Speaker 2: special episode of our podcast recorded live at a conference
Speaker 2: which you've probably never seen before.
Speaker 4: Yeah.
Speaker 3: This was at the Lazard for Square conference, and we
Speaker 3: interviewed Dimitri Shevalenko. He is the chief business officer of Perplexity,
Speaker 3: which is something you might have used before. We certainly
Speaker 3: use it.
Speaker 2: YEP, one of the leading AI models, and so this
Speaker 2: is a conference related to media and deal making, and
Speaker 2: so we talked about what the impact of AI is
Speaker 2: going to be on news, media and brands, the Internet
Speaker 2: as we know it.
Speaker 3: We also took questions from the audience, so you will
Speaker 3: hear us referring to question that we are receiving on
Speaker 3: the app. We hope you enjoy take a listen. All right,
Speaker 3: So here's my first question, should we even be talking
Speaker 3: to you? What I mean by that is I could
Speaker 3: just go on Perplexity and ask all these questions and
Speaker 3: it will give me a pretty decent answer. What's the point.
Speaker 4: So, first of all, thank you for having me it's
Speaker 4: great to be here. The I love that that tee
Speaker 4: up and you guys are scheming backstage of like what's
Speaker 4: gonna be the hard opening question? But I love it
Speaker 4: because the thing that humans will always be uniquely exceptional
Speaker 4: at is asking questions. So perplexity may have the answer,
Speaker 4: but perplexity does not have an innate desire to be curious.
Speaker 4: And that's what you guys have. And that's why journalism
Speaker 4: is so important, and that's why having these conversations important.
Speaker 4: It's about the questions, not necessarily the answers.
Speaker 2: Kind of related to this, I guess. But here's the
Speaker 2: thing that I always think about, which is I enjoy
Speaker 2: using perplexity, et cetera. Let's say, you know, you have
Speaker 2: great relationships with all the news publishers, etc. And they're
Speaker 2: really cool with it all, and all those deals get solved,
Speaker 2: et cetera. Like why do we need the internet as
Speaker 2: we know it that has things called websites built for humans?
Speaker 2: Now that we're in this age where we can go
Speaker 2: to a chat about or something like it, and the
Speaker 2: answer is right there, do we need to have what
Speaker 2: are traditionally called websites anymore? Why would a publisher continue
Speaker 2: and invest in design and all of these things when
Speaker 2: I could just get the answer from perplexity or tragic
Speaker 2: pterior whatever else.
Speaker 4: So again it goes back to I think the reason
Speaker 4: we're drawn to media properties is because of the questions
Speaker 4: the journalists and editors are asking. Right, it's not necessarily
Speaker 4: it's the framing. It is the what is actually worth
Speaker 4: asking about, what's worth reading about. Perplexity doesn't have answers
Speaker 4: to that. You have to come to perplexity already armed
Speaker 4: with a question. And oftentimes people you know read news
Speaker 4: and there's something they didn't understand fully and they come
Speaker 4: to perplexity to get that deeper understanding. But the spark
Speaker 4: that comes from editorial judgment, that comes from the intuition
Speaker 4: of a world class reporter, and that's why we're excited
Speaker 4: through programs like Commet Plus to find new business models
Speaker 4: for that.
Speaker 3: How do you actually judge editorial judgment or quality of
Speaker 3: news sources? Because I can imagine a future where a
Speaker 3: lot of our news consumption is through something like a
Speaker 3: perplexity model, which means that you're basically the arbiter of
Speaker 3: what information is reliable. So how do you make those decisions.
Speaker 4: It's not me at at the wheel. You know, ultimately,
Speaker 4: this is where we focus a big part of our technology.
Speaker 4: It's building accurate AI. And the thing that we believe
Speaker 4: is that's going to be most scared in the future
Speaker 4: is not intelligence, it's trust. I think the bedrock of
Speaker 4: trust is transparency. That's why Perplexity pioneered, showing you exactly
Speaker 4: which source the information is coming from and empowering users
Speaker 4: to apply their own judgment of whether that is a
Speaker 4: good source or not so good source. But we deploy
Speaker 4: many different algorithmic strategies. Oftentimes, if many publications are saying
Speaker 4: the same thing, you know, that's a strong signal that
Speaker 4: they're onto something, and you know, the outliers you're you're
Speaker 4: kind of more sensitive to. But this isn't you know,
Speaker 4: it's not a simple problem, and this is why, you know,
Speaker 4: we raise a lot of capital and hire the world's
Speaker 4: best technologists to build accurate AI.
Speaker 2: So I think anyone could sort of intuitively understand why
Speaker 2: publishers might be anxious about Perplexity as being a destination.
Speaker 2: Evidently it's not just news publishers. Literally, when since we
Speaker 2: got on stage in three minutes ago, news rope at
Speaker 2: Amazon demands perplexity to stop AI from a stop AI
Speaker 2: agent from making purchases. Just broke three minutes ago from Bloomberg.
Speaker 4: What is the job Bloomberg.
Speaker 2: It's not just news that's anxious about the idea of
Speaker 2: perplexity being the destination. Clearly, it's all kinds of businesses.
Speaker 4: So I think, and I haven't read the article yet,
Speaker 4: but I think I have an understanding the issues. The Ultimately,
Speaker 4: the issue with Amazon is tied to perplexities. Web browser
Speaker 4: called Commet and Comment is a web browser that has
Speaker 4: an AI assistant built into it. And what we think
Speaker 4: is important is that consumers and end users have access
Speaker 4: to powerful AI when they are accessing publications, accessing websites,
Speaker 4: accessing the Internet. The first thirty years of the Internet,
Speaker 4: we had lopsided AI where big tech you know, Google, Netflix, Facebook,
Speaker 4: they used AI to control what we see, to get
Speaker 4: us to click on certain things and not click on
Speaker 4: other things. And what is changing now is Perplexity is
Speaker 4: focusing on giving powerful AI to the end user, and
Speaker 4: we think this is the right thing to do. We
Speaker 4: think it's a principle viewpoint that when you're on Amazon,
Speaker 4: it's not Amazon's business. Whether you're using AI to help
Speaker 4: you evaluate is this the best thing to buy? You know,
Speaker 4: can I find it cheaper somewhere else? Do I actually
Speaker 4: need to buy the other thing they're telling me to
Speaker 4: buy with it? The world's wealthiest people they have personal
Speaker 4: shoppers that help them do this, and we're democratizing that
Speaker 4: sort of intelligence, that sort of assistant access to everyone.
Speaker 3: Just in terms of competition. Is the argument basically that technically,
Speaker 3: you know, a Google or an Amazon could create similar
Speaker 3: products to what you guys are doing, but their own
Speaker 3: business model basically prohibits them from doing what you're doing.
Speaker 4: I should have you joined our next investor pittures exactly
Speaker 4: that it is, there is a big opening for an independent,
Speaker 4: neutral AI player that is aligned with users. You know,
Speaker 4: Google is still you know, they're generating you know, one
Speaker 4: hundred billion in revenue per quarter, which is amazing, but
Speaker 4: a lot of that is coming from getting you know,
Speaker 4: average you know, their their customers, advertisers, you know Amazon,
Speaker 4: they're trying to get you to buy as many things
Speaker 4: as possible.
Speaker 1: Uh.
Speaker 4: Our success metric is do users are they willing to
Speaker 4: pay for a Perplexity subscription? And so we're purely aligned
Speaker 4: with our users.
Speaker 2: Speaking of competition, like what is the differentiator? Okay, maybe
Speaker 2: Amazon has some obvious angles and some of the others
Speaker 2: Opening Eyes seem sort of independent in the same bucket.
Speaker 2: It's really huge. It's one of the biggest websites in
Speaker 2: the in the world. It does and strike many of
Speaker 2: the things that they offer replicated seems sort of similar
Speaker 2: to perplexity. You must get this. I know private stock
Speaker 2: answer this, but what is the differentiator between you and
Speaker 2: an open AI?
Speaker 4: So you know, I'm fortunate to get to speak with
Speaker 4: a lot of curious people that have to answer a
Speaker 4: lot of hard questions every day, and there they tell
Speaker 4: me they use perplexity, And it comes back to work
Speaker 4: focused on accuracy above all else. Chat GBT is an
Speaker 4: amazing product, but they built a product that is optimized
Speaker 4: for engagement. It's trying to be your cheerleader or your coach.
Speaker 4: It's trying to get you to keep going. And they've
Speaker 4: also built a product that is designed not to use
Speaker 4: the best LM in service of your question, but it's
Speaker 4: designed to use their lms. And so part of being neutral,
Speaker 4: part of being independent, trustworthy, accurate is using the best
Speaker 4: possible technology to answer the question the best possible way,
Speaker 4: and so being an aggregator of all the best models,
Speaker 4: having our own independent search infrastructure that isn't the being
Speaker 4: search API, which is what chat GPT uses. Those are
Speaker 4: all the building blocks of a more useful, accurate AI.
Speaker 3: What's your actual revenue source at this point, because I
Speaker 3: know you're big on subscriptions, you experimented with ads. I
Speaker 3: think you might have paused that at this point, but
Speaker 3: it does seem if you're trying to be different to Google,
Speaker 3: you probably don't want to be as ad driven as
Speaker 3: they are.
Speaker 4: Yeah, So we're seeing tremendous traction with both consumer subscriptions
Speaker 4: and then companies buying the enterprise version of perplexity for
Speaker 4: their employees. Ultimately, it's in that enterprise context where having accurate,
Speaker 4: useful knowledge is incredibly valuable. And so you know, we've had,
Speaker 4: you know, been fortunate with a enterprise go to market
Speaker 4: team of just five people, you know, seeing that business
Speaker 4: you know, more more than eight x this year, seeing
Speaker 4: you know, many multiples increase in our consumer subscriptions, and
Speaker 4: we're excited about building products that our user aligned that
Speaker 4: also create marketing value for brands and advertisers. But this
Speaker 4: isn't going to be rebuilding AdWords and click based systems.
Speaker 4: We think it's important to create real value so that
Speaker 4: when your personal AI agent powered by Perplexity is evaluating
Speaker 4: a potential commercial opportunity something you might buy imagine, you know,
Speaker 4: alongside the answer you get an offer for an exclusive discount.
Speaker 4: That would be something that your agent would say, Hey,
Speaker 4: this is even though this someone's paying for this to
Speaker 4: show up here, this is actually a good deal. If
Speaker 4: it's just an AD that says click me, click me,
Speaker 4: click me, we don't think that's going to be sustainable,
Speaker 4: and that's not the type of marketing products we're looking
Speaker 4: to build.
Speaker 2: Can we talk a little bit about the fundraising environment
Speaker 2: for AI? I mean, obviously we know how crazy, you know,
Speaker 2: intense things are in.
Speaker 3: The word are people throwing cash at you as you
Speaker 3: walk down the street.
Speaker 2: But also it feels like every day, like I like
Speaker 2: it used to be when I paid attention to startups,
Speaker 2: it felt like there were discrete rounds. There's a C
Speaker 2: and then an A, and then a B and maybe
Speaker 2: a C and then an I P O. When I read,
Speaker 2: it feels like every day there is just it. Are
Speaker 2: the are the rounds? Blending into each other, so that
Speaker 2: it's just this sort of ongoing stream of oh, here's
Speaker 2: a new raise, et cetera. Here we got some new chips,
Speaker 2: and then we are giving them some equity, et cetera.
Speaker 2: Has the line between rounds is it blurring?
Speaker 4: Yeah? So before Perplexity, I mean I spent most of
Speaker 4: my career at consumer internet companies by the extint as
Speaker 4: a founder of a robotics startup, and AI is definitely
Speaker 4: a different fundraising environment than that was, which was very challenging.
Speaker 4: I think at his core, a lot of investors believe,
Speaker 4: and we agree with this belief that what's happening with
Speaker 4: AI now is as profound as the original introduction of
Speaker 4: the Internet, and so they're there are going to be
Speaker 4: a wave of new generational companies that are being built
Speaker 4: right now. And you know, a lot of the value
Speaker 4: is actually uh, you know, compounding while these companies are
Speaker 4: privately held, and so that that is you know, there's
Speaker 4: a lot of conviction by by private investors in that.
Speaker 4: And I think a second piece is that investors themselves
Speaker 4: are power users of products like Perplexity. They are people
Speaker 4: that have a lot of questions, do a lot of research,
Speaker 4: and so they have not just an abstract understanding of
Speaker 4: a balance sheet, They have their own intuition, you know,
Speaker 4: which is very different than like B to B SaaS
Speaker 4: where it's like, you know, you have to go do
Speaker 4: thirty customer interviews and you're you're kind of getting all
Speaker 4: the second order information, you know, with perplexity, use it yourself.
Speaker 4: You understand the value the time that you just saved,
Speaker 4: the creative expansion you just had, and and that gives
Speaker 4: investors conviction. And so that that is you know, fueling
Speaker 4: this environment. Is it at times you know, too frothy?
Speaker 3: Sure?
Speaker 4: You know, are there going to be some investors that
Speaker 4: make the wrong bets? Absolutely, But the core human need
Speaker 4: of getting good answers to good questions, you know, we
Speaker 4: we think that is boundless and so we're we're confident
Speaker 4: in the path ahead.
Speaker 3: Well, speaking of froth, is there anyone you turn away
Speaker 3: in terms of being an investor?
Speaker 4: Yeah, So there's this phenomenon that that tends to happen
Speaker 4: in bubbly periods of multi layered SPVs. So SPVs are
Speaker 4: special purpose vehicles and so you basically have many layers
Speaker 4: of outsource fundraising where you have you know, principal agent
Speaker 4: misalignment where the fundraiser is not making money off the investment,
Speaker 4: they're just making money off the management fee. And so
Speaker 4: we often get approach from players in that space, and we,
Speaker 4: you know, whenever we can detect that's what it is.
Speaker 4: We we avoid taking on funds like that because we
Speaker 4: want investors who are getting direct access to perplexity and
Speaker 4: who are in it for the long haul, who aren't
Speaker 4: just trying to make a quick buck on a management
Speaker 4: fee flip.
Speaker 2: I want to talk about this more. I'm really fascinated.
Speaker 2: We actually we did an episode with A. Vlaw Ton
Speaker 2: of the Robinhood cee only was talking about tokenization of
Speaker 2: private assets, and I guess this sort of actually relates
Speaker 2: to the question about discrete rounds. But does it feel like,
Speaker 2: you know, in theory, if some sort of slice of
Speaker 2: equity perplexing maybe people so forwards or these vehicles that
Speaker 2: are linked to it, does it feel like the line
Speaker 2: between what it even means to be a private and
Speaker 2: a public company is inevitable going to disappear, especially add
Speaker 2: in the fact that we seem to be on this
Speaker 2: road where public companies will not be expected or required
Speaker 2: to have to report information as timely as they used to.
Speaker 4: I think it's important when you're a privately held company
Speaker 4: to control the sale of your equity. And I think
Speaker 4: that the challenge, you know, why we haven't, you know,
Speaker 4: we've been approached by a lot of these tokenization schemes.
Speaker 4: And you know, again, if you have folks on your
Speaker 4: cap table that are not aligned for the long term,
Speaker 4: they may be looking for quick flips and then that
Speaker 4: creates a weird signal in the market, and that may
Speaker 4: harm you know, a primary raise, right, and so the
Speaker 4: the noise that comes with that. It's not like we're
Speaker 4: short on other you know investment, you know, avenues. So
Speaker 4: it's just an unnecessary kind of noise risk.
Speaker 3: So, speaking of throwing money around, the thirty five billion
Speaker 3: dollar bid for Chrome was what was that? Was that
Speaker 3: a troll?
Speaker 4: We that was when we made that bid, the DOJ
Speaker 4: had still not decided whether Chrome would be divested from Google.
Speaker 4: The web browser as evidenced by you know, Amazon's behavior
Speaker 4: is clearly incredibly valuable surface area, and that you know,
Speaker 4: thirty five billion was a starting bid. You know, at
Speaker 4: this point I can safely say I think Chrome is
Speaker 4: worth more than that. But what I can confidently say
Speaker 4: is we had more than thirty five billion of investor
Speaker 4: interests in making that bid, so it was not a
Speaker 4: constraint on you know, the funding side. Obviously, Google does
Speaker 4: not want to sell Chrome unless they will be forced to,
Speaker 4: and it doesn't look like the government will be forcing them.
Speaker 3: So you're serious about that one. It's not just a
Speaker 3: sort of antitrust flag waving exercise.
Speaker 4: No, we had, you know, very large sovereign wealth funds
Speaker 4: that you know, we're we're kind of lined up and
Speaker 4: ready to go.
Speaker 2: Here's a great question from someone anonymous via the app.
Speaker 2: Can you talk about unit margins? You often hear this,
Speaker 2: it's like, oh, these AI companies they're not even on
Speaker 2: a unit basis making money given the compute costs et cetera.
Speaker 2: Are what can you talk about gross margins? And right
Speaker 2: now whether like you know, a given query is profitable
Speaker 2: given the cost of delivering.
Speaker 4: And so the uh A paying pro subscriber to Perplexity
Speaker 4: is profitable for us. Okay, so the unit margins are
Speaker 4: strong the free users right now because we do not
Speaker 4: monetize them, you know, we don't we lose money on
Speaker 4: those AI companies. I think something that is underappreciated. They
Speaker 4: generally actually when they do the accounting of free users,
Speaker 4: they attribute that to research and development because you're still
Speaker 4: using those prompts to improve from the model. So you know,
Speaker 4: it does allow for your unit economics to potentially appear
Speaker 4: more pristine than they are.
Speaker 2: Are all pro users profitable? Because this also strikes me
Speaker 2: as something unique with AI, which is that you know,
Speaker 2: when back when Twitter was and it's infencing power users
Speaker 2: were good, it feels like in the case with AI,
Speaker 2: sometimes you get these power users where you're losing money
Speaker 2: on them. Are all pro users profitable or do some
Speaker 2: use it so much that it is more than the
Speaker 2: subscription fee?
Speaker 4: I mean, I don't. It's not a material amount. And
Speaker 4: we've also introduced a Max tier, So we have a
Speaker 4: twenty dollars month pro subscription, and for the folks that want,
Speaker 4: you know, the most expensive reasoning models and higher limits
Speaker 4: on them, there's a two hundred dollars month product called
Speaker 4: Max and that also gets you access to our email assistant,
Speaker 4: and so I think you'll you know, and other companies
Speaker 4: have also introduced kind of higher tiers of subscription. So
Speaker 4: this is not a problem that's unique necessary to AI,
Speaker 4: and you kind of introduce tiers of service uh to
Speaker 4: to support it at scale.
Speaker 3: What does your expenditure actually look like at this point? Like,
Speaker 3: what are you spending the most money on? Is it
Speaker 3: we read about these insane salaries for engineers going to
Speaker 3: Claude or Open AI or whatever. Is it talent retention
Speaker 3: or is it compute power? Is it the content deals
Speaker 3: with media organizations? What are you spending on?
Speaker 4: So the biggest expense is inference? Right, So it is
Speaker 4: the cost of compute. Uh, when you're you're asking a
Speaker 4: question and running it through an l M, you know
Speaker 4: that that is uh, that is a material expenditure. We
Speaker 4: you know, Perplexity doesn't do pre training. So the sorts
Speaker 4: of AI PhDs that other companies are paying, you know,
Speaker 4: reported one hundreds of millions of four we're not that.
Speaker 4: That's not we're not in the mark of that. We
Speaker 4: have incredible AI application engineers and that's that's what we
Speaker 4: recruit for. Ultimately, engineers that are joining Perplexity joining because
Speaker 4: they believe we're just getting started, right and they're coming
Speaker 4: for an equity appreciation story that's you know, already bearing fruit.
Speaker 4: But we're we're just at the beginning of that journey.
Speaker 2: Maybe this is sort of a way of restating Tracy's question,
Speaker 2: but it all feel like any AI conversation. It's like
Speaker 2: what is the bottleneck right now?
Speaker 1: Right?
Speaker 2: Is it talent? Is it capital? Is it compute? Is
Speaker 2: it power?
Speaker 3: Etc?
Speaker 2: Like if you could have unlimited amounts of any one
Speaker 2: of those things, what would you want more of right now?
Speaker 4: So I think it's important to buy fur Kate. There's
Speaker 4: the companies that do the training of foundation models, and
Speaker 4: those are the ones that are really pushing for the
Speaker 4: massive infrastructure buildouts. Yeah, we're not constrained on compute for
Speaker 4: inference at the current usage levels. But as you know,
Speaker 4: behavior shift, I mean by a show of hands in
Speaker 4: the room, like how many people have stopped primarily using
Speaker 4: Google when they have an informational question? So you know
Speaker 4: about with eighty percent of the room, you know, raise
Speaker 4: their hands and we see the early adopter behavior in
Speaker 4: you know, audiences like this. You know, folks that work
Speaker 4: in financial services, people that again for whom quickly getting
Speaker 4: high quality information matters. As you know, this behavior becomes
Speaker 4: more mainstream, we obviously will need more compute for inference.
Speaker 4: But the the folks that are are kind of talking
Speaker 4: about trillions of dollars in investment. It's it's really a
Speaker 4: different universe than ours. It's unclear to me why some
Speaker 4: of those investments are needed. Sometimes it feels like a
Speaker 4: strategy of, you know, kind of what what the US
Speaker 4: was trying to do with the Soviet Union, of just
Speaker 4: getting your your competitors to go broke by you know,
Speaker 4: being able to raise the most capital. And we'll see
Speaker 4: how that plays out.
Speaker 3: Since you mentioned financial services, we have a good question
Speaker 3: from the audience, and we've done some media naval gazing.
Speaker 3: I'm sure we're going to do some more, but for
Speaker 3: now financial services naval gazing. What do you think the
Speaker 3: impact of AI will be on places like Wizard and
Speaker 3: other Wall Street firms.
Speaker 4: I just think this is going to be a incredible
Speaker 4: flowering of creativity and productivity lift. I think of using
Speaker 4: a product like Perplexity and other AI tools in the
Speaker 4: day to day of somebody that works in investment bank
Speaker 4: is really twofold. The first is saving you eighty percent
Speaker 4: of the time to get to the eighty percent first
Speaker 4: draft of a work product. Right in investment banks, that's
Speaker 4: kind of putting the other pitch decks doing modeling, just
Speaker 4: gaining tremendous efficiency. And it's important to distinguish it's not
Speaker 4: about making that workflow autonomous. You still absolutely need human
Speaker 4: judgment on what the end output should be, how to
Speaker 4: approach it. This is not about replacing investment bankers. It's
Speaker 4: about giving them tremendous leverage. I think the more disruptive
Speaker 4: impact is now that it got a lot easier to
Speaker 4: begin a new initiative, to begin a new prospect. How
Speaker 4: many more new engagements are you going to be able
Speaker 4: to spin up? Right? Because the biggest constraint on new
Speaker 4: business is an employee feeling they have the bandwidth to
Speaker 4: take it on. And you know, experienced leaders now have
Speaker 4: much more leverage, and I think that's going to play
Speaker 4: a profound role, Atlizard, and you know part of why
Speaker 4: I'm excited to be part of the organization.
Speaker 2: I love these audience questions because they're saying things that
Speaker 2: I would think that are reminded me and that I
Speaker 2: would have been rude to say, you didn't answer the
Speaker 2: first question about are you going to kill journalism? But
Speaker 2: someone says you didn't answer the first question, how would
Speaker 2: journalism survive when AI has skinned it? I get Oh, yeah,
Speaker 2: you know, AI is an interested in asking questions, but
Speaker 2: it's not. The question is like, why would brands continue
Speaker 2: to like build out these presents for like a human
Speaker 2: reading and scrolling when I can just go to one
Speaker 2: destination that doesn't necessarily click me anywhere else.
Speaker 4: Well, I mean, when I look at the earnings numbers
Speaker 4: for the Wall Street Journal, the New York Times, for
Speaker 4: Bloomberg media companies seem to be doing fine well.
Speaker 2: New York Times is doing well. Games and I don't
Speaker 2: know if you get earnings numbers for but.
Speaker 4: What I hear, you know, like some subscription numbers.
Speaker 2: But by the way, I was doing a lot more
Speaker 2: than Games actually did not. It's a very impressive company.
Speaker 2: But by and large it does not look like the
Speaker 2: actual news business.
Speaker 3: It's a lifestyle company is doing particularly well well.
Speaker 4: But I think it's it's part of the value of
Speaker 4: the mundle I mean, this is a very This is
Speaker 4: very analogous to when the Internet was first introduced. You
Speaker 4: had traditional brick and mortar retailers, and the best brick
Speaker 4: and mortar retailers adapted to the digital environment, and the
Speaker 4: best publishers are adapting and gaining leverage with AI. I mean,
Speaker 4: last night we had the CEO of Axel Springer talk
Speaker 4: about how he's leaning into AI and it's actually an
Speaker 4: incredible opportunity for productivity. And so I don't think this
Speaker 4: is zero sum. I do think there's going to be
Speaker 4: some publishers that thrive and others. And the media business
Speaker 4: was already facing challenges, you know, certain segments of it
Speaker 4: well before AI. So I don't see this as being
Speaker 4: kind of the fundamental tension.
Speaker 3: But if you fast forward five or ten years from now,
Speaker 3: what does the front page of the Internet actually look
Speaker 3: like to you? And what exactly is I guess the
Speaker 3: economic packed between media and platforms such as yourself, What
Speaker 3: would the ideal packed agreement actually look like? How basically,
Speaker 3: give give me your vision of the Internet in five.
Speaker 4: Years were two seconds. We're introducing something called Comment Plus,
Speaker 4: which we already have the Washington Posts and Conde Nast
Speaker 4: La Times, many great publishers signed on for and it
Speaker 4: was really inspired by Apple News Plus, where if you
Speaker 4: are a Comment Plus subscriber, which is five dollars a month,
Speaker 4: and we bundle it into Perplexity pro So even people
Speaker 4: that didn't necessarily you know, want to pay for it.
Speaker 4: We're taking money out of our cut and feeding it
Speaker 4: into this program to seat it. As you consume premium
Speaker 4: content in the comment browser, we're then sharing that revenue
Speaker 4: back proportionally with publishers. And it's actually accounting for not
Speaker 4: just page views of premium content, but agent actions on
Speaker 4: that content and citations in the commt browser. And so ultimately,
Speaker 4: I think subscriptions are a very powerful business small for media.
Speaker 4: I think there's a lot more to do there, and
Speaker 4: we want to play a leading role in doing that.
Speaker 2: I'm very impressed by the finance module within Perplexity. You know,
Speaker 2: there's a whole graveyard of companies that have tried to
Speaker 2: take down our employer at Bloomberg. Do you see yourself
Speaker 2: as a potential challenger company? Tracy asked about you know,
Speaker 2: financial services, et cetera. Do you see yourself, at some
Speaker 2: point down the road is a challenger to the terminal?
Speaker 4: Yeah? I mean, how many people have access to Bloomberg terminal.
Speaker 4: It's like, I mean, you guys like, it's not it's
Speaker 4: not millions, right, So yeah, it's not millions. So for us,
Speaker 4: the success of Perplexity Finance is it's similar to what
Speaker 4: I was saying about with Amazon and people that have
Speaker 4: personal shoppers like Bloomberg Terminal, is that like it's this
Speaker 4: is like company.
Speaker 2: And so when you're thinking about the lizards of the
Speaker 2: world and all the other banks, could you at some
Speaker 2: points see yourself pitching Perplexity or Perplexity Terminal as a
Speaker 2: world all these other ones had failed to do it.
Speaker 4: I think for us, the bigger opportunity and the bigger
Speaker 4: opportunity is not to go after Bloomberg Criminal. It's giving
Speaker 4: everyone who can't afford Bloomberg Terminal a version of it
Speaker 4: that is useful for them and when they're making retail
Speaker 4: stock investment decisions, when they're understanding the interplay of the
Speaker 4: markets and the news cycle, that they have access to
Speaker 4: powerful technology. Right, So it's not I don't think we
Speaker 4: can't like Bloomberg Terminal, like people are there for the chatting,
Speaker 4: Like there's all kinds of features there that we're not
Speaker 4: trying to replace. Thank you, and it's an amazing product
Speaker 4: and amazing brand. I think it's for us this is
Speaker 4: about democratizing, expanding the scope of who has access to
Speaker 4: premium financial intelligence.
Speaker 3: Another question from the audience. This one's from Oliviate Chastan,
Speaker 3: What do you think will be the key skill sets
Speaker 3: for media entertainment executives to manage the impact of AI
Speaker 3: on content industries?
Speaker 4: I mean, I think my answer to this is the
Speaker 4: answer I think it's a key skill set for any
Speaker 4: professional in the age of AI is you have to
Speaker 4: get really good at asking the right questions. And so
Speaker 4: that means asking your teams why are they working on,
Speaker 4: what they're working on, what's the leverage, what's the unique differentiation?
Speaker 4: And so it is approaching their business with a profound
Speaker 4: curiosity and an understanding that you know there are new
Speaker 4: disruption and leverage opportunities, and to kind of lead with
Speaker 4: that curiosity.
Speaker 3: Everyone always says that, but what does a good prompt
Speaker 3: actually look like to you? Can you give us a
Speaker 3: specific example of like a prompt that really impressed you?
Speaker 4: I think to me, asking a good question it's like
Speaker 4: a level deeper than like the prompt engineering is is
Speaker 4: kind of that that in some ways will get abstracted
Speaker 4: very soon. When I say asking a good question, it
Speaker 4: means a question that embodies and embeds all the known
Speaker 4: knowledge on a given topic. And the question you're asking is,
Speaker 4: then you know, where do you push the frontier, Like
Speaker 4: what is the thing that is not yet knowable that
Speaker 4: in your question you're pushing your organization on, you know.
Speaker 2: Going back to the browser question about the bid for
Speaker 2: Chrome Google itself earlier this year, there are a lot
Speaker 2: of people, Oh, Google is going to get disrupted by AI,
Speaker 2: and it's a classic innovator's dilemma. They invented all this
Speaker 2: tech and they're not making now the stock market views
Speaker 2: Google's done phenomenally or alphabet They've done phenomenally well, and
Speaker 2: a lot of people have really changed their tune on them.
Speaker 2: If the browser is such an important part of the
Speaker 2: real estate here, does that just give them a massive
Speaker 2: leg up? I mean, I know you're going to launch
Speaker 2: have your own and open AI is going to have
Speaker 2: its own, but Chrome is everywhere, Like how that sounds
Speaker 2: like a very big mode.
Speaker 4: It's a very powerful distribution leverage point. But their greatest
Speaker 4: strength is also a weakness and that they built it
Speaker 4: around a a adword system where they're reliant on people
Speaker 4: clicking on links, and the behavior of clicking on promoted
Speaker 4: links will just matter less in the future of the
Speaker 4: Internet than it has in the past.
Speaker 2: Speaking of promoted links, this is another question I've been
Speaker 2: wondering about. Sometimes I see these companies and they advertise
Speaker 2: on LinkedIn and they offer what I think is sort
Speaker 2: of would be the equivalent of like the AI equivalent
Speaker 2: of SEO. Is that all snake oil is there?
Speaker 4: Like?
Speaker 2: Whatever does that exist? Can are there these games that
Speaker 2: publishers or any brands can play to do well in
Speaker 2: AI or they Is that sort of a fraud?
Speaker 4: I don't want to call it a fraud. I have
Speaker 4: not uncovered those companies provide analytics, but they are not actionable, okay,
Speaker 4: and so I have not found an actionable output there.
Speaker 4: And in some ways our purpose is to prevent those
Speaker 4: insights from being actionable because if you can game a
Speaker 4: Perplexity answer, it means it's not accurate and trustworthy. And
Speaker 4: so you know, if they do find a hack, like,
Speaker 4: we have better engineers that will fill that hack.
Speaker 3: I have a slightly philosophical question, but is there any
Speaker 3: way to inject a tiny bit of randomness or creativity
Speaker 3: in some of Perplexity's output? And what I mean by
Speaker 3: that is I think at this point we're all aware
Speaker 3: of algorithmic content moderation and the idea that if you
Speaker 3: start your Netflix account and you watch one romantic comedy
Speaker 3: for the rest of your life. Netflix is going to
Speaker 3: be throwing like Matthew McConaughey films that you forever and
Speaker 3: ever and ever. How do you deal with that aspect
Speaker 3: of it, the risk that people are funneled into like
Speaker 3: one particular answer stream or one corner of the Internet.
Speaker 4: So memory will be an important feature of products like Perplexity,
Speaker 4: and the way we avoid that trap is transparency, just
Speaker 4: like we do with sources, where we actually show you
Speaker 4: all of the things that we've added to your memory.
Speaker 4: And if you don't want to be pigeonholed as a
Speaker 4: romantic comedy lover, you just delete that memory. And I mean,
Speaker 4: I'm kind of I recently got into health supplements and
Speaker 4: now every time I ask about health supplements, my decision
Speaker 4: to begin, you know, pomegranate supplements is getting mentioned the answer. Yeah,
Speaker 4: And I you know, I deleted that because I'm like,
Speaker 4: you know what, I don't want it like coming back
Speaker 4: to the pomegranates, as great as they are, and that
Speaker 4: was you know that that I just went and deleted
Speaker 4: that memory. I saw where it was, and you know,
Speaker 4: I'm pomegranate free and my answers.
Speaker 2: There's a question here about let's see but the comparison
Speaker 2: to the first wave of the Internet. So this person
Speaker 2: is talking about content creation, AI agent studios, pace of
Speaker 2: change moving very fast, I mean, is decision. What's really
Speaker 2: extraordinary to me about the last several years is the
Speaker 2: speed with which we seem to get new paradigm. Right,
Speaker 2: blogs were one or going to be a big deal.
Speaker 2: That was twenty years ago. They had a lifespan of
Speaker 2: a few years. Then you know social media, Twitter, etc.
Speaker 2: There's speed. How do you think about things get overturned
Speaker 2: so fast these days? How do you think about making
Speaker 2: investment decisions under such conditions of uncertainty?
Speaker 4: Yeah, this is I mean, a funny time to drop
Speaker 4: his name, but this is where we love the Jeff
Speaker 4: Bezos line of you know, it's the hard thing to
Speaker 4: predict is not what's going to change, but what's going
Speaker 4: to remain the same. I think from our vantage point,
Speaker 4: the bedrock is accuracy and trust, right, And that's actually
Speaker 4: as intelligence gets much more powerful, it gets more powerful
Speaker 4: and manipulating us, and so that that's why kind of
Speaker 4: that trust bedrock is paramount. And that said one of
Speaker 4: my you know, management mantras is that I have absolute
Speaker 4: conviction that six months from now I'm going to have
Speaker 4: a top three priority that today I don't know what
Speaker 4: it is. And that embedded in that is an understanding
Speaker 4: that even the model makers themselves when they release a
Speaker 4: new model until us out, they don't know what emergent
Speaker 4: capabilities and what the useful applications of that will be. Yeah,
Speaker 4: and so kind of you know, having core foundational principles
Speaker 4: well at the same time preserving agility, adapt adaptability and
Speaker 4: being the best at applying the new gifts we get
Speaker 4: for the service of users. That that's going to be
Speaker 4: a key operating skill.
Speaker 3: There's a second part of that audience question that Joe
Speaker 3: just asked, and I think it's it's probably the one
Speaker 3: that's on all of our minds, and it's the bluntest one.
Speaker 3: But is AI in a bubble?
Speaker 4: There are certainly parts of it that.
Speaker 3: Are not you obviously, but your competitors presumably.
Speaker 4: I mean, I think of all of the time and
Speaker 4: leverage that professionals and knowledge workers are getting and to me,
Speaker 4: the ROI on that, like I can see the trillions
Speaker 4: of dollars in economic productivity happening from it. But are
Speaker 4: there certain companies that have just raised too much capital
Speaker 4: and is going to create imbalances in the ecosystem?
Speaker 2: Yes, all right, but I really have forty five seconds.
Speaker 2: My issue is a lot of things still don't work
Speaker 2: in AI. I tried to ask Chad Gpt yesterday how
Speaker 2: many full school weeks are in New York City public schools.
Speaker 2: It's like, oh, I'd have to count it by hand,
Speaker 2: and it seriously said that. I posted a screenshot of it.
Speaker 2: A lot of these agent things like, they don't work
Speaker 2: very well. Like a lot of things. I once asked,
Speaker 2: who are the most common guests on odd lots over
Speaker 2: the years. It just gave me a bunch of this
Speaker 2: was this was not your site. But I'm just saying,
Speaker 2: like a lot of AI agents and so forth, they
Speaker 2: sort of about.
Speaker 4: Halfway through, Yeah, I'm tempted to do a live check
Speaker 4: of weather perplexity. We give you a good answer on that.
Speaker 4: But this goes back to what I was saying about
Speaker 4: emergent capabilities. The fail case, and this comes up actually
Speaker 4: in many enterprise conversations, is just because you tried something
Speaker 4: two months ago, it doesn't mean and it didn't work.
Speaker 4: It doesn't mean it's not working today, and so we
Speaker 4: all need to keep this open mind that these technologies
Speaker 4: are getting smarter and better at a rapid clip, and
Speaker 4: you know those are solvable problems.
Speaker 3: All right, Dimitri, thank you so much for thank you,
Speaker 3: thank you for conversation. Really appreciate it.
Speaker 2: That was our conversation with Dmitri Schevalenco, chief business officer
Speaker 2: at Perplexity.
Speaker 3: Shall we leave it there, Let's leave it there, all right.
Speaker 3: This has been another episode of the All Thoughts podcast.
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our guest Dmitri Schevalenco. He's at Dmitri one. Follow
Speaker 2: our producers Kerman Rodriguez at Kerman armand dash O Bennett
Speaker 2: dashbod at kill Brooks at Killbrooks. From our Odd Lots content,
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