The AI-powered answer engine, Perplexity, has decided to abandon advertising for now as the company believes sponsored placements — even labeled ones — risk undermining the trust on which its AI answer engine depends.
How Did This Happen?
Media reported that Perplexity has phased out the ads it began testing in 2024 and has no plans to bring them back, the Financial Times reported.
Moving ahead, this report mentioned that the AI search company could revisit advertising or “never ever need to do ads.”
This is a big decision, as If Perplexity remains ad-free then brands lose paid access to a fast-growing audience.
Earlier, the company reported that it gets 780 million monthly queries and with sponsored placements gone, brands have no way to get visibility inside Perplexity’s answers other than via organic citations.
When it comes to Perplexity, it was one of the first AI search companies to test ads, placing sponsored answers beneath chatbot responses.
Then the company said that ads were clearly labeled and didn’t influence outputs, but now executives say that perception matters as much as policy.
One of the executives said, “A user needs to believe this is the best possible answer,” further adding that once ads appear, users may second-guess response integrity.
Cautious About Conflicts of Interest
Perplexity’s exit comes when other AI platforms are experimenting with ads. For instance, OpenAI is testing ads in ChatGPT for free users, placing labeled sponsored results below answers.
Coming to Google, it runs ads in AI Mode and AI Overviews within Search, though not in Gemini. On the other hand, Anthropic has publicly committed to keeping Claude ad-free.
According to Perplexity, subscriptions are its core business and it offers a free tier and paid plans from $20 to $200 per month.
So far, it has more than 100 million users and about $200 million in annualized revenue, the executives said.
Besides this, Perplexity has introduced shopping features, although it doesn’t take a cut of transactions. This is another indication it’s cautious about revenue models that could create conflicts of interest.
The executive said, “We are in the accuracy business, and the business is giving the truth, the right answers.”
