Long Term Vision and Execution

We're not doing a welcome to the term. That's a good point. We haven't got a welcome in there. Let's go . We can we can wing it because we're pros like what does it normally say ? Welcome to the Times Tech podcast. I am Danny Forton, Danny in the Valley. And I am Katie Prescott, Katie in the city of London. Hello Danny. How are you? I'm living the dream. How are you? The Dream San Francisco in August? Yeah . It actually , I will say, it's been a super strange summer, but all of a sudden, like this week it's like we have literally a week before the kids go back to school and all of a sudden it's like summer beautiful weather, blue skies , maybe go to the pool later. I heard one of your sons running earlier with a picture. He did a game job of saying, That's not really dawling. You know what's interesting? This is a tech podcast. First of all, I don't say jawling to my kids because I'm way too American for that . But interestingly, they both came in showing pictures because my son, my elder son, he's really, really into drawing . And so he watches YouTube videos, drawing videos. My daughters do that. Yeah . Yeah. And then this morning the, kid s are home, I'm working, my wife's working. It's all a bit mad around the house. And I go down to make coffee and my elder son is basically doing a drawing video for my younger son. Oh, that's so funny. We're gonna make the mouth and now you do the arms and blah . So they both came up to show like basically what they draw but it was my six year old drawing what my eight year old told him to draw. Are you filming them and making a fortune on YouTube? Your latest side . I'm going to have them . Yeah, exactly. I'm gonna have them do unboxing videos make millions. I've had another vibe coding. That kid was his name? The kid Ryan . Do you know about this kid? No . This dude, this little kid Ryan was making millions at age like ten , but making all this money just like unboxing toys and stuff. He had like millions of followers on YouTube. What? Unboxing. Toys, I have to look this up. Do you not know this? There's a whole genre in home . I want my children to find out. YouTube videos. Yeah . Unboxing. Like the newest toy, the newest video game, the newest thing. Right . Our guy Ryan, the unboxer . How much do you think he's? Oh, goodness, me, I don't know three million dollars ? One hundred million dollars . Oh , you're joking . That's insane . Isn't that insane? As often discussed, we're in the wrong jobs . Every week, that's the theme of this pod. Oh , but anyway, we digress because we have a very big show today. small It's a matter of perplexity. This is the AI search company that we were laughing about last week after here we go, another massive number, their thirty five billion dollars bid for Google Chrome. That's right. They called it Project Solomon. Every good bid needs a codame . And we read out the letter and you know, be honest, we rolled our eyes a bit because this is a three year old company. They're very interesting. They seem to always be in the news, but they're three years old. They're worth , according to their venture capitalists, eighteen billion. So they're like, yeah, yeah, we're going to buy this thing that's at least two or three times worth what we are worth, but yeah, we're going to just have it. But it's fine because we've got some investors who 'll put the money in. I'm really looking forward to today because their chief executive Aravan Serinavas is going to join us and we can ask him whether that was it was straight from the horse's mouth. Straight from the horse's mouth about AI search and they've also launched their own web browser called Comit. There'll be tons to discuss, but there's before we get to that, there's some news stories happening. I don't know if you've seen there's never any news in tackle . Yeah . So I think we should start briefly with the soap opera, that is US chip US semiconductor policy. Just when he thought it couldn't get any more chaotic Donald Trump as he does . He's on his plane. Yeah for swan. It's like yes ex,actly that one, the old Air Force one. He's like, yeah, I might impose some new tariffs on some chips. Maybe two hundred percent, three hundred percent. Who knows? Maybe five hundred percent . At a zero, pick a number exactly. But he's like off the cuff as he does. He's like, I'm going to impose new tariffs this week , they could be two, three, whoever, you know, pick a number and you know, Q global freakout. Total global freakout. And I'm laughing, but actually it's really, really not funny. The UK is better known for design in semiconductors than it is for manufacturing. But there are a small cohort, particularly of quite high spec chip companies here who are really, really worried about this . And I've been speaking to them over the last few weeks about what it means that everyone's been a bit reticent to say anything or do anything because they just don't know . But on Monday, the government sent them all a letter saying, hold on to your hats, essentially. It's not a direct quote. Hold on to your hats. There is going to be some news. We're expecting an executive order soon tariffs on semiconductors. It didn't put a number in the letter, but it did say there have obviously been reports that it is going to be significant . And the letter is asking the companies what they're doing about it. You know, are you changing location? Are you sitting on your hands , you what's doing ? Tell us and we'll pass it on to our negotiators. So certainly it seems like Whitehall is expecting that executive order that he talked about on Air Force One on his way to Alaska to negotiate with the Russians. Yeah . I mean, you know, many things on his agenda. Moving swiftly So there is an expectation certainly here that that's coming. And that will worry companies, certainly the British ones who were optimistic that they might be exempt as a friendly country. It doesn't sound like they will be. Yeah, and I do think, you know, because there's some firms like TSMC, you know, which is the big maker of all of these the most complex chips, Taiwan semiconductor , Samsung, they're building these megafactories in the U . S. long So term, that might be fine. I think that's ultimately the goal of these policies. But it is interesting like semiconductors very quickly have kind of gone from like, yeah, they're kind of important. They're in computers, they're in data centers. Yeah, yeah, yeah, to like and this is kind of a trope, but I think it's true is like oil. They're like the new oil. Like they're this like strategically geopolitical thing that everybody is suddenly deeply concerned about because in the world of, you know, the AI god machine , these are the things are going to make it, and they also can make AI powered weapons and all kinds of stuff. So everybody is suddenly like focused on that's it. It's the economy and the military. It's been interesting speaking to businesses as well about their dealings with the U. S. administration. So in I think it was twenty two, Biden brought in the Chips Act and was putting fifty billion dollars behind R and D for US chip companies or chip companies doing research and development in the US and also building fabs in the US . And they're saying now it's much harder to get money out of the US government , those subsidies don't seem to be as forthcoming. So even though Trump's talking a good game about the importance of semiconductors , and I think Intel's found the same recently, it's actually harder to access that capital . And that's another funny anecdote, someone told me. They were at the G seven semiconductor meeting, which is apparently a thing. I didn't get anybody . Well, luckily , because the Americans there were slightly person a non grata. There was a bit of feeling amongst the other countries that you're the ones causing all the problems at the moment. So we're going to stand over here and you can stay by yourself. Well, that's the other thing is Trump is talking about taking a ten percent stake in Intel, which is just another extraordinary you're like, wait, what? Yeah . But speaking of , we do this for you, dear listener, next week , we are going to have Lisa Sue, who is the CEO of AMD on the pod . I'm traveling down to their headquarters in Santa Clara later this week and we're going to talk to her about just this whole swirl in which she's involved because of course, AMB is one of the two companies longer than NVIDIA who kind of struck this side deal where they're like, we'll give you white house slash US government , fifteen percent of any earnings if we can allow to basically reopen our business and sell into China again. I can't wait for it to be fascinating. Yeah . So that should be really fun. That should that will be coming up next week. So you'll again , speaking of, you know, coming straight from the horse's mouth, we should get some really good sense of what is actually happening amidst the swirl of, you know , geopolitical wrangling by the negotiator in chief. The poor little semiconductor stuck in the middle. Oh, one other thing before we get to perplexity , open AI this week , it's emerged over the past several days that some investors are going to buy a bunch of shares from a bunch of insiders, a bunch of employees , other investors at a five hundred billion dollars valuation. Wow, happy employees. Five hundred billion. And this is just like months ago they think the last one was gonna say what was the software billion , I think. Yeah . Yeah , so like weeks a couple months later, we're now at five hundred billion . And what's really interesting is that the company is not raising a single cent. This is just people wanting to sell out and people are so desperate to get in and they're like, yeah, five hundred billion sold and give us all the shares, but can you imagine being and I don't know how there are certain restrictions for insiders for employees, but can you imagine being a CEO who was there three years ago when it was worth whatever ? twenty billion . fifteen billion . And now it's worth five hundred and you can cash out and go and lie on a beach in Thailand. But I think it's really interesting. They're not raising any money. They're just allowing some people to cash out . And because, you know, their revenues are like doubling, now they're, I think by the end of the year, the speculation is that there'll be at twenty billion dollars annual recurring revenue , you know, from again, effectively a standing start of zero three years ago . I mean, they're still losing tons of it. Well, it beats up. I think it's a really tortoise, doesn't it? I think it's even a little bit more lucrative by the way I just wanted to I just wanted to bring that up because it feels like it may be like a moment it may not that will look back on back. Remember when they just like didn't even raise any money but just allowed a bunch of people to sell out at five hundred billion . Yeah. That was crazy . But you know, it is just quite a crazy. It feels unstoppable, almost like Nvidia or Bitcoin. You sort of think can't go any higher and just keeps going up. And then it just keeps going . But back to this week Perplexitay last week, Katie, you actually read out their letter to for sure isn't. Dear Mr Pachi, we'd like to buy Chrome for thirty four point five billion dollars , love from perplexity . Thank you very much . Yeah, to which most people said yeah, okay, sure . You know, great. Sort of boss my uncle, kind of thing. And at the time when I spoke to people in the industry , they dismissed it as a bit of a stunt . And people on social media said the boss Aravan had gone crazy . But they did make a formal offer and they promised to keep Chrome open source, keep Google as a default search , throw three billion dollars into this company . So was it trolling? Was it a genuine shot at a monopoly busing deal ? Because of course, Chrome is potentially in play. It is potentially in play, of course, because and maybe even by the time this podcast gets published , we may have an answer about its future. So there was a judgment in the US that Google search had a monopoly. Google had a search monopoly over search and one of the options to end that monopoly would potentially be selling Chrome. But certainly Google has not put it up for sale yet. So it worked. It was a little fun. But before we get into the interview, I think we should just have a tiny bit of history about perplexity . So it was founded in twenty twenty two by four guys from various AI businesses . It deals with thirty million queries every day and its last funding round, as you said earlier, valued at eighteen billion dollars . Do you ever use it? I mean, can you describe what it's like to use for ? I do. It's a bit like well, it's a bit like chat GPD or any of these things, you know , where you ask a question and it gives you an answer. Early on, they did some really interesting things around kind of putting sourcing into their answer and be like, and then suggesting follow on questions down below . So it is quite useful . And they also recently launched Comit, which is their own browser, which they built almost as like a kind of digital assistant. It can kind of finish tasks on your behalf , help you find stuff . You know, it's a glimpse potentially the future of Web Search where you have this it's kind of like an agent in a way where it'll just do stuff for you . I think the thing I would say about perplexity is, you know, they're also the other thing to keep in keep in mind is like they're being sued by a lot of different companies including our parent company, I should say, well, subsidiaries of our parent company . Yeah , which is kind of like par for the course basically any AI company worth its salt these days is getting sued and this is part of the very big kind of thorny question of like well, , what's fair use? Who should get paid? How does this whole new model work in this world? So it's all about content being used in the engine. So subsidiaries of newspapers, I should say, who own the Times , they've sued Perplexity AI for alleged copyright and trademark violations. She said sort of one of the many lawsuits that's going on in the space at the moment, but Perplexity has denied them. Yes, denied all allegations and, you know, so that kind of that train will trun trundle on, you know, with them and open AI and anthropic and all these guys all the other guys , but there I will say and I think that's what I'm interested hearing from Irvind is, you know, I think the broad idea out here people talk about moonshots, the moonshot is like to unseat Google , which, you know , as a three and a half year old startup, you know, that's a big mountain decline, but I think that's what they're going for. And whether it's trolling or whatever , perplexity has managed to stay in the news , which I think is, you know, to a degree there is value in that of just like remaining relevant. I don't know if you remember . Their name also came up in the potential bidding for TikTok , which again was the same thing where you're like, you little startup are going to buy TikTok. Yeah, that's a lot of swagger, isn't it? I mean, that's that's a cocky move. Yeah. So anyway, so but they're just a really interest ing, obviously, super ambitious company . And so it should be a fun chat . I guess my first question is for you , what's the future of the internet? What does that look like ? If you say, I don't know , pick a number two years from now, five years from now relative to our experience up to, you know, this year where it's like, you know, you Google, you do this, you do that, everybody kind of knows what that experience is. So the number one thing I would mention is the future belongs to the curious and the internet will be shaped by them and the internet will be enjoyed by them, those who are curious and those who have high agency. Now the trajectory towards getting there what exactly it means in terms of benefits of being curious , not fully clear yet . But a lot of the things we do today feel like going through a thousand cuts. It feels horrible to do a lot of tasks online today. AI was supposed to be the solution for all of this, but the only thing AI helped us so far is chat and search and summarize content out there , do some research tasks, but everything else we're still like doing the same old way . You're booking your ticket, you're picking your flight seats, you're identifying some event or concert some obscure blog, you're moving around meetings, you're replying to emails , you're shopping with all these cluttered ads. That's a lot of cognitive work currently if you're doing , which is not near ly making us smart. It's actually like boring and mundane. I think like if we can take all these annoying parts away from you and delegate that to an AI , the hope is that you are really just gonna do what you want. You have a lot more time on your hands. It's not really about giving you back time, it's more about giving you back fun you truly deserve to have. So my hope is just a less clunkier, more fun , whatever is annoying delegation , having the power to like get knowledge anytime, anywhere and taking actions on top. That's the sort of internet that we want to help create. And we kind of call it like bringing the fun back. And fun doesn't mean just playing video games or watching TV shows . Fun just means like doing whatever you want, like reading another person's article or listening to a podcast simply because you want to ingest the knowledge . And you as a business , what's your route to get there? Is it first stop, replace Google as the default kind of home page of the internet . I don't think that's how you do that. Like if you really are interested in creating this future, replacement of Google is not the objective function. It's like actually solving the hard problems along the way. It's the true objective funct ion. Replacing Google is the mere side effect of that, in my opinion. For example, like why do we need to you go back and ask why do we need to replace Google? You replace Google because Google is clunky. That's the reason you're replacing Google now because Google is evil or anything like that. And why is it clunky because it's built for a different economy an economy that needs it to be clunky, right? And they cannot change that. Yeah, when you search for something , you have all the sponsored results, like way at the bottom are the quote unquote organic results, the actual kind of what the algorithm would otherwise put up there if there wasn't a bunch of paid ads appearing . Yeah. So if you go back to the origins of the internet, it was actually meant for connecting people, connecting people to information, open web access, open web. The goal was information dissemination. And I think we need to go back to those true goals through the paradigm of AI where it's less about just organizing information now. It's more about giving access to knowledge and expertise . That's very actionable . Like at the end of consuming answers , you are leading people to the next question next question and the bandwidth , the information bandwidth experience is just another level that they can actually execute something at the end of a learning session with an AI . And they also get to be curious about many more things now that they could never get to because earlier they would spend two hours just like opening all these different tabs and put these things together in their heads. Well, so because you know for people who haven't used it perplexity is like, you know, you can tell me whether it's the correct characterization in your eyes, but it's effectively an AI search engine you go on there, you ask a question , it gives you an answer then prompts you with a bunch of other potential questions that are like kind of follow on questions. There are citations of kind of the sourcing of those answers, et cetera. Yeah. I guess the question is when you talk about Google, the clunkiness of Google, like as you said, there's a whole architecture of the internet that Google has built and meta has monetized. So if you're talking about making the internet fun again and giving people a different experience , do you not then have to recreate the rest of the internet, the lives beneath it, the whole economy that props us all up.. Yeah You're right. We do need to. And people are going to pay for expertise , right? People are going to pay for delegating their tasks that they don't want to be doing to an AI . that And's increasingly like the growth of the subscription model . So do you think broad like broad strokes we're going to kind of move away from an ad based economy on the internet where everything is quote unquote free, but you're just bombarded with kind of suboptimal results and you're wading through banner ads and all that stuff to a world where I pay for perplexity or a few other surfaces that basically like my digital butler, my digital concierge, my digital research assistant who helps me navigate and do stuff I don't want to do. So let me preface by saying I think ads are not going to die entirely . It'll take a new form , even in a world where you have agents. Okay, let me give you a simple human level example. Leave the AIs . When you have an executive or when you have some person in your team . And let's say you, Danny are a little hard to reach and someone is trying to sell you a podcast and product , something to edit videos or a new microphone that's much better . And the only way they get your attention is they talk to your person on your team who's helping you like prepare for the podcast. So they could first try to convince that person and your assistant can then come and convince you . You know what, Dani, I really heard about this amazing thing. You gotta try it. So that's one form of ads in a world where you don't actually directly interface with a brand advertis er , but you trust someone to be an intermediary between yourself and that advertiser. Right now that intermediary is Google . Except you never even ask for that. You don't have any contractual relationship between the Google search engine yourself and it doesn't deeply understand you. So all the advertisers are just bidding against that query the query that you put, not you, Danny, it's not personalized to you, but if you and an AI agent have a pretty good understanding and it deeply understands you, your preferences. You can describe it in simple natural language. It keeps changing over time. It's kind of like you've hired human a human assistant and brands compete to get that assistant's attention . It can ignore it, it can have a separate contract with you that's under NDA, like the brands cannot see it. But you might also be open to like learning about certain brands. Like maybe you're open to like exploring new mics . So that's another mechanism in which advertisements could work in the AI world . My goal, honestly, is to usher a new era where click based advertising completely dies. I don't want that to happen. I want it to be more preference based, fine grained and really personalized and only if the user wants it , that level of control , that would be great because I don't think everybody's like, I don't think fundamentally we are opposed to ads, right? Like we don't want spam and we don't want clutter and we don't want clickbait , but we do want like to learn about new interesting things . So ads are aligned with the whole idea of being curious except they need to be done the right way, not in a greedy man ner. So our goal is like let's first get the core foundation right which is making sure you can build a great personal assistant . Which is which is partly , I mean that's manifested and again, correct me if I'm wrong in comment. Comment is your new exactly is your new web browser, but it also acts as it could do stuff for you. Right. Like I asked comments 'cause I have an ability you guys sent me a code so I could download it. And I'm like, you know what? Comment . Could you just reply yes to all my LinkedIn requests for friends? And it just did it. It didn't open a new page. It's like, yep, these people have request ed, I've said yes, I've said yes, cool. Hey, comment, can you look for flights between here in LA and Southwest? And then it does all of this work in the background. It says on the side, who's like, These are the flights coming and going. I could choose these and get you all the way to the kind of to the pay to the payment page effectively. That's right. So what you're trying is what you're trying to do is basically become the new the new, theoretically smarter gatekeeper for people's digital experience. I would just like to think about it as building your personal assistant at the end of the day. And cognitive operating system, that's the other way we think about it. Delegate all the boring work here, queue it. You don't even have to wait and watch it do stuff like just delegate and move on . Keep doing stuff you enjoy. Come back and watch . So I think that that's the sort of mode that we want get com et to feel like where you can like actually have processes that run on your behal f. Ads gets more and more reliable. That's how we earn your trust. We're not earning your trust by putting no ads or all these things. Like we're obviously not having ads right now, but some people think privacy or no ads are the way to owner uses trust. We think like the real way to owner uses trust to be really useful . Add new values. It's so useful that I will pay for it. And exactly pay you to do something on a monthly basis and you have a very big business for, example. Exactly so think about it this way. Google has, I don't know, like three and a half four billion users. Exact numbers on mention. two hundred billion dollars in advertisement revenue. Let's assume two hundred fifty even . And that's like over five billion users . So whatever is the revenue , I think one hundred dollars per user, like fifty dollars per user. That's what it is, right? Per year. Can I do that? Like maybe a billion people paying fifty dollars a year or one hundred dollars a year on average . It'll be a trillion dollar company and it won't have all these like ugly dependencies Google has on like pandering to the advertisers and the user and themselves and the shareholders. Like it gets very complicated for them, right? The challenge though is we've been trained for the last quarter century to get all our stuff for free on the internet. And I speak as a journalist who in my industry like, yay, the internet. We're going to put it all out there for free. And then realizing many years later, like , huh , bad for business. We need to kind of put that horse back in the barn and it's been a very difficult messy process that has seen a lot of companies disappear. So number one, we should position perplexity as a business that only that doesn't thrive on every user paying. So when you if you have a billion users and you on an average make fifty dollars per user per year , great business . But that doesn't mean the fifty dollars needs to come from every user or fifty dollars needs to come only through users . Let me give you an example. If you delegated, let's take your flight or hotel example. If you delegated comet to book a hotel for you or a flight for you and the airlines in the hotel pace me a cutout of the transaction they got , which honestly they'd already do to human travel agents . Yeah . That is the whole business of online travel agency . Booking. com makes hundreds sixty five billion in gross bookings a year and they take fifteen percent of all the bookings so they make twenty four billion in revenue and they pay Google sixteen billion roughly at least something like eight to fifteen billion advertisement and take the rest eight billion for their profits great business . So something like booking or like hotels start paying perplexity cut for the transactions they get through Comets agent and they have to spend less on Google's ads as a result of that because they're getting new deal flow through something else and people like this experience more because it's more personalized and you can, you know, they don't have to deal with all this clunky, you know, like old legacy UIs that are built by websites of the past. Yeah, then that's great. Like it's a win win for everybody. And for us, it's a way to make money that's not from the user. So they're like at least four or five different ways in which you can make money right now through a product like Perplexity and Comit that we feel like getting to a point where we make fifty billion dollars to one hundred billion a year in revenue and twenty five to thirty billion or like maybe fifty billion even in profits at the end of the decade or maybe slightly after. I don't actually know these timelines at this point. It's certainly like possible. Like all we need to do to get there the, foundation is build a great assistant at the end of the day. So that is the fabulous future. We're right now in the Messy Present. So the Messi President includes my parent company suing you. The I think it was the biggest Japanese publisher dressed sued you guys in the past week . And the whole ide a and you guys and every other AI company are being sued, broadly over the same idea, which is you're mining all of this content , producing answers based on that content , but not compensating the creators of said content and therefore you,'re kind of if that continues, you hollow out media which , you know, without making a judgment on it is just like, you know, for the media, that's a bad thing . Right. So how do you think about that when you think about, you know, as you're try ing to kind of get to that future and where we are right now and particularly the media case. So first of all, there are three things. Number one, people want a better internet . Number two, publishers want to get paid. And number three, people are already using AI to have a better internet . So all these three things are true. As for the first, like people wanting a better internet, like I said, internet used to start it off as a place where people found information . Then it got cluttered with back content, human slops, spam ads. And that's the reason there's a lot of high friction interfaces right now. There is no joy. You got to bring it back. And AI is definitely helping to get there because until now, AI was only accessible for the gatekeeper in terms of ranking . But now you, the user has the AI to consume the content on the web the way you want and ignore whatever slop you don't want to see. That's true power. At the end of the user, it's great. That can help you to bring back the joy to the user, right? Fantastic . Now, publishers also need to get paid because a product like ours would not work if new content is not getting created . And so we just think that taking the old model that's built around traffic in clicks is not the right way to be ready for a newer future , where people still have the power at their own hands to decide what they want to consume and what they don't want to consume. And delegating AIs to go read for them if they want to, right? So that's why we're going to we're going to announce in a few days a new publisher program that's centered around like an Apple News like model , but in more friendly to both people and AI's consumer content. So that's the model we want to get to where is that akin to like Spotify , for example, whereas like you know, it's, kind of you get a cut of every play or every read . It's not exactly like Spotify. It's more similar to Apple News where there is a subscription called like say comment plus and we take a huge chunk of that revenue and give it to publishers. So there will be a Comment Plus subscription like Apple News Plus. You pay for that and you can access content of publishers through that, both as a human and de legating your AI to Acist . And we're going to like grandfather it by making every Proplexi Prone Mac subscriber automatically like have Comment Plus so that way immediate revenue gets created for the sake of the publisher's vantage point and we're going to give away like a huge chunk of it to the publishers. So we think as we grow in our subscription business both through the Ppleerx Pro and Max subscriptions as well as separate standalone comment plus subscription. We think like this can create a revenue mechanism that's already in the range of tens of millions for publishers , but grows to several hundreds of millions or even billions over time . for the industry is what you're saying. Yeah, right. Yeah . Our goal is to set up a way where business growth will make publishers also grow . And by the way, we don't want to be the only player doing this. We actually want to put it out, put out the structure and food transparency so that we actually want other AI companies to also do this instead of just trying to pay for tokens and train models and because those licensing agreements are very short term. Like the former chief scientist and co founder of OpenAI said Ilias Woodski were for training us hit a wall. So the most of the data on the internet has already been trained on and like all the additional tokens that are being created right now are not as valuable anymore . Right. So we need a model that rewards for consumption of content in the context of knowledge and answers and actions . And that's what Perplexia trying to create. We are a different company and therefore we're trying to create a different model. And the theory is that if this works, there would be enough money being generated by those subscription or the share of that kind of subscription that it would cover kind of all of the theoretically lost ad revenue from a click revenue that a bunch of your free users and the whole kind of your whole ecosystem is using. That's right . Have you talked to publishers about this? Have they been like yeah , we're right on or we're like very we are very encouraged by the talk so far and we hope to announce the initial set of partners when we go public about this . The other question is, you know, early, I think it was earlier this year or late last year. You guys name was thrown in the mix for a potential bid for TikTok .ly Recent, you made a bid for Google Chrome . Yes , which is many times larger than you guys. The immediate reaction, I'll say my knee jerk reaction is like you're like trolling everybody . You're like, this is a way to stay relevant, to stay in the news, to raise brand awareness, but there's not a snowball chance that you guys are actually going to be able to buy something like that . Is that fair or no? Well, so two things here. I mean we can do this for if that was our objective, we can do this for perplexities buying the Tesim or the New York Times or like or Wall Street Journal, right ? Or we're going to buy NVIDIA . You guys should buy you guys should buy NVIDIA. It's a good business Exactly. So we can we can we can say all this stuff, but that's not what we're doing here, so the two bids have two different objectives but also some similarities . There was a unique moment in time when TikTok was supposed to be divested from Bitans at least Ikok America. Of course it got you know coupled with all the whole tariffs negotiation. So beyond the point it went way beyond our pay grade . we So don't have a chance there . And the ruling there is that there's actually not going to be any change other than a new set of shareholders coming and owning TikTok America , but the business is still going to be operated by Byte Dance . And why would it have helped us like we actually did feel like there's a valuable distribution of users who are consuming content that's not necessarily useful and there's a lot of like fake news spurting there . And we as a company that's really grounded in accuracy in facts and utility can bring a meaningful change to a platform that's used by one hundred million Americans on a daily basis . And that was that was the objective. And many of us clean up TikTok . Yes . And add legitimate value through community nodes , AIs , better ranking that's more focused on giving power back to the user in a way that's doing similar to comment. As for Google Chrome , same thing again , even even all even after we said things like everybody else was like, yeah we're also going to make a bid. But our goal here is make it very clear to the to the government to the DOJ and the judge that Google's arg uments that there would not be any other credible buyer are not valid. Okay, we're not saying, hey, you absolutely have to type a chrome and like screw over Google or anything like that. That's not our point. If you feel like that is the right judgment at the end to curb their monopoly power , then we are ready to take it and run it and do it in a way where it's not going to have a short term impact on their business . Because we did outline that the Google will remain the default search on Chrome even if we run it. And we did say we would invest at least three billion dollars in the open source Chrome project. And we did say that we would, you know, like continue to support and maintain Chrome for several years , even though we have our own browser And if you ask, like, who else could have done this bit ? Could it open it? I've done this. Yeah, sure. But opening , all the IP flows back to Microsoft. So it's like passing IP from Google one monopoly to another. Yeah . Meta, Amazon, Apple, all of them are like monop olies in their own way. And even if you leave the monopoly argument aside, has anyone else launched a good AI browser so far? Exactly. So we felt like it was not like even though you might think it's a troll. Like we actually felt like I genuinely felt like we had the most credibility to at least place a bid. Now whether thirty four and a half was the actual value or is it like one hundred or is it fifty? I don't know, right? Like these are different like we went by the estimates that people had, which is like twenty five billion to fifty billion in that range. So we picked a premium on top of twenty five . Yes, it's higher than our valuation, but such bids have happened in the past where a company has made a bid for a higher number than their market their own market cap to get something that's extremely valuable with three billion users here . It is a long shot bid. It is hard. It's going to be a low probability event to have the judge rule that matter , but we at least want him to be aware that there is a bid from another AI player who's trying to like give Google genuine competition in this space. How does this all go wrong for you? And what I mean by that is we are in this crazy moment twenty twenty five. I just did a piece last week about like the three trillion dollar estimate for data centers. Like everybody's losing their minds , you know, single coders getting paid hundreds of millions of dollars, et cetera, et cetera. I've been around long enough to know that when bubbles happen, most companies die and a few emerge from the kind of the ashes . How do you not die or maybe less dramatically become Bing? By the way, bing, if spun out, would be worth one hundred billion at least. You should buy bing. A hundred billion for bing . Really? Well, Bing , the search engine, I'm not talking about the edge browser . I think Bing is supposed to make twelve billion a year in ad revenue, something like that across all people who are at least seventy years old possibly . But again, like it's kind of like useless without the Windows ecosystem. But Bing's API business itself can make a billion a year in revenue. So it's not it's not like it's considered a joke, but it's not like that much of a joke as people make it out to be. Now how do we not die? I think our goal is honestly to build the best personal assistant that can be built and give the power that luxury that a few billionaires in the world have , which is they can get anything delegated to anybody at the tips of their fingers in the hands of everybody. And anytime you've given luxury that was only accessible to a few people in the world to many people and you've done it effectively, it's usually worked out pretty well. It takes time obviously to achieve it, but it usually works out pretty well and that's our goal. We die if we cannot execute on this. We're not actually betting on A I progress to keep continuing in a dramatic fashion like the model labs are. Like even in the case where the bubble bursts and something like open AI collapses entirely like, you know the, whole five hundred million dollars target project makes no sense , then perplexity is still fine open source will keep catching up. China will keep releasing open source models that are great and that's already happening. We're already deploying a ton of open source models in our product . So our dependence on these model labs will keep reducing, the cost of serving our product will keep coming down . The amount of people using the product as a result of that can keep going up and as we drive more reliability and value , we can monetize all the queries and use this even better . So the way VI is by completely botching up execution . Right. you're fighting against anthropic and open AI who are, to be clear, losing tons of money, but also raising making money too tons of money and making tons of money. Yeah. So there you set it, like they are raising tons of money for what purpose, right? That 's the key point to consider. They're raising tons of money to go build a machine guard that's the only way it makes sense to keep pouring this much money into the business. It's like, oh, what if they actually built like five percent chance they built a God and the god is worth like trillions and trillions ? So they're distracted by they are victims of their own like capital. Like they have to invest the capital back into data centers, infrastructure , model training runs and like continually showing new progress benchmarks on like these obscure coding and mats and competitions and like things like that. And like we have none of those distractions. We can literally focus on, hey, can I build a great travel agent for Danny? Can I actually make sure this thing can go and shop reliably . Can I make sure like this thing can actually like place coffee mug orders for me when I want to like open a new shop? Like that's the sort of things that they don't care about. And like that's actually where the value of the internet is really just reliably delegating research and commerce and like all these different tasks that no one wants to do. My theory is that , you know, you saw it with Chad GPT five, it was like they rolled it out and it was like, oh my god, this is going to be the most amazing game. Everybody was kind of like it's marginally better in some ways it's worse . Like if that kind of striving for an increasing intelligence, I feel like that's going to slow down , which then makes product more important . For opening IS, but then you should ask like, did it make sense for them to have all this valuation in CapEx then, right? Okay , like they do have seven hundred million users. That doesn't mean it's it's actually that valuable , right? Like there are products you could argue like Google has four billion users . And I think that's where like perplexity is a lot safer bet for people to make because yes, it is priced high, but it's not five hundred billion high . Yes, it has twenty X fewer users in OpenI, but it's growing faster too, right? So I think my sense is that, yes, you're right, any saturation and model progress is going to drive more focus on product layer. But then what happens to all the data centers you build? No one's there to use it. What happens to all the researchers you hire? They're going to go for the hundred million offers given to them by Zuckerberg, right? Like that's already happening. And then the whole brand of your companies you can, build new differentiated, amazing models. That's why you're valued at this price. If you're just another product company, then you're no longer worth that much. Your brand is no longer worth that much. So I think Anthropic is making a slightly different bet, which is, hey, we're just going to go very deep into coding . And developers are always having paying power. They're going to keep paying for it. And we're going to automate the software engineer . And I think like that's a bet that I feel like, you know, even if they 're not going to lose like it's a great bet and their models by being good at coding are generally useful to us too on agentic tasks. So that's why I think like there's more synergy and like overlap there in a year from now , let's have you back on the pod in a year and then we can check in. But in a year from now, is there something that you think will be doing with agents , with AI out there in the world that seems impossible today or surprising today or unlikely today ? I would say that a lot of things that we repetitive ly do today , like checking stock prices , or seeing if someone has posted an update on something , or seeing if a shop is like, you know, that's been closed for a while, but needs to be open . A lot of these things are maybe the answer sounds boring to a lot of people listening here and they're probably expecting me to say something crazy, but this is already hard to do today I know that because we are trying to build these things. Yeah. I'm pretty confident in one year from now like most of these asynchronous non periodic tasks can be done by just like you prompting it and it'll just be taken care of for you. My AI assistant will just handle sections of my life that today I have to do. Yes. And it's going to feel like the browser is your personal intelligence cloud which has processes running all the time doing your bidding . And it's going to keep earning your trust by being reliable . Like go book me the terrorist ticket next time she announces a concert. Like you don't even have to worry like you have access to my wall to do it. I think that that's the sort of thing we are trying to build. And I hope one year from now if we talk, like we made like a pretty significant progress here. You're like obviously hunting very big game. You're talking about like kind of remaking the internet, kind of suppling Google, like the very big things where does that come from? Is this always how you have been? No, no, no, not at all. Like I mean, I real thatized it's easier to attract smart people by working on harder problems that's for sure. I am genuinely like attracted by anything that's making me more curious . Knowledge was like a core asset for me to grow up and valued a lot in mybringing . Emphasized a lot. To the extent that my parents are prouder of me getting a PhD and like publishing a lot of good papers during my time as a researcher than you know, like being a CEO or running a company and like doing interviews . They're happy about it, but they're more interested in like, you know, me like still remaining true to my academic roots. Right. I grew up in Chennai, India. And then I came to the United States did a PhD in the University of California at Berkeley . And that's what got me into AI. And academics never rest. They always want to like keep working on the next thing and everything that did serves as the foundation for them to like start building on top. So that's how I run perplexity too. Like we initially started to try to do like searching over databases, like just employment records and then searching over like larger databases and then searching over the entire web and then okay not just search but research agents and then okay not just answers but actually it's like actually executing stuff. So I mean, obviously like I would love to build an OS, like I would love to build a phone. I would love to do all whatever everybody wants to do, but I'm fully aware that like the browser is just the beginning today and like we need to take it through. For example, one year from now, I want to do the things I said that can be possible . And hopefully like a lot more . And it'll eventually build up towards a world where we We all have a lot of time on our hands to just go learn anything we want . Wow, what a great interview. How amazing to hear from him. So there you go. Aravanst'rs Ranenavas making the case perplexity may not be just trolling the giants, but actually trying to take them on. These are interesting times They certainly are they are crazy . I mean, the fact that that company went from in a year a valuation of five hundred million to now eighteen billion , again, it's just like what ? Where does it all end? When does the bubble pop and what is the anchor? And the idea that they would attempt to buy Google Chrome, like Google , the search company that has spawned its own language , you know , it's yes. Yeah, who 'd have thought it? But yeah, there we go . That's why it's fun covering this industry because you have people who are just like, yeah , I'm going kind to of completely upend or take over or displace the big fish in whatever industry. Especially these days, I feel like everybody is like, well, AI makes everything possible. I'm just going to go for it. And like I said, most of it won't work, but if you never know what's gonna happen from one chapter to the next . You do not, you do not. So on that note, speaking of because, you know, you always have to have a backup plan plan . I'm gonna buy some stuff on Amazon . And I'm gonna turn on my camera . And I'm just gonna see what you're gonna buy, Dunny makes I mean, what are you what are you gonna unbox next? I mean, this is a family podcast, but there's not there's no niche for like the adult unboxing segment. What's in the box? What's Danny got his in box this week? We all need a backup plan , Katie. I don't want do you have one? Do you have a backup plan? Nothing is as good as this. I need to get one . When AI comes for our jobs. Yeah, 'cause normally the journalist back up is PR, but I think that AI's already come for that. Exactly. AI is coming for that too. Right . Well, next week will be fun . As I said, I'm traveling down to Senic, Santa Clara, California to speak with Lisa Sue of AMD, so that should be super, super interesting. And I'll report back on my book. See you next Friday. See you next week . Bye bye