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Perplexity Abandons AI Advertising Strategy Over Trust Worries
Perplexity halted AI ads to protect trust and will prioritize subscriptions and enterprise sales after growing revenue 4.7 times last year, executives said.
- On Monday, Perplexity announced it phased out ads late last year and isn’t exploring new ad deals, executives said at a roundtable with reporters.
- Amid worries about user trust, Perplexity executives said ads in AI answers risk making users doubt responses and appear upselling, so the company will focus on business customers and high-powered users.
- In 2024, Perplexity tested sponsored answers beneath chatbot responses, but the ad effort stalled and former top ads leader Taz Patel quietly left last year.
- The company will concentrate on subscriptions and business sales, expanding its enterprise sales team of five people to target large business customers, executives said on Monday.
- Last week, OpenAI began testing ads for free ChatGPT users, while Anthropic, maker of Claude, rejects ads; this split reflects rising large language model training and operating costs.
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Perplexity AI Abandons Advertising Strategy To Preserve User Trust and Prioritise Subscription Models | 📲 LatestLY
Perplexity AI has abandoned its advertising strategy, citing concerns over user trust. Despite rivals like OpenAI introducing ads to offset high operating costs, Perplexity will focus on subscriptions. Executives believe that maintaining unbiased answers is essential for long-term growth, as the industry remains divided over how to monetise large language models. 📲 Perplexity AI Abandons Advertising Strategy To Preserve User Trust and Prioritis…
AI ads debate is more about culture war than business decision
Knowing your audience is one thing, but how you want to appear to them seems trickier for AI firms. While OpenAI recently began testing ads in the free version of ChatGPT to expand its revenue streams, Perplexity has reversed course, winding down its advertising push late last year and saying it won’t rely on ads in the future.“The challenge with ads is that a user would just start doubting everything ... which is why we don’t see it as a fruitf…
More AI companies test the integration of ads into chatbots' answers, in order to make money and because of users who don't pay subscription. The company Perplexity gives up advertising, explaining that...
Perplexity switches sides in AI ad wars
AI search startup Perplexity is distancing itself from ads amid fears users won't trust chatbots with an agenda to upsell. The move highlights an emerging crossroads for the AI industry as the sector's biggest players hunt for stable sources of income to bankroll massive spending, with giants like OpenAI leaning into ads and others like Anthropic promising to keep them out. Perplexity began phasing out ads late last year and isn't exploring any …
Perplexity Abandons AI Advertising Strategy Over Trust Worries
AI company Perplexity is stepping away from advertising over concerns that it will erode user trust, despite moves by rivals to introduce ads as an alternative money-making strategy. Perplexity was one of the first AI services to embrace ads in 2024, after it ran tests where sponsored answers appeared under the chatbot's answers. That approach however was phased out last year, and executives at the company now say they don't plan to revisit it, …
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