Compare / Perplexity AI vs OpenAI
AT A GLANCE
FUNDING HISTORY
Perplexity AI
OpenAI
BUSINESS MODEL
Perplexity AI
Perplexity uses a freemium model. The free tier gives unlimited basic searches powered by a standard model.
Perplexity Pro costs $20/month and gives access to more powerful models (GPT-4, Claude, and Perplexity's own models), unlimited Pro searches, file uploads, and image generation. Perplexity Enterprise Pro is designed for businesses with team management and API access.
The company also recently introduced advertising through "sponsored follow-up questions" — a controversial move that some see as inevitable and others see as the beginning of the end for ad-free search.
OpenAI
OpenAI makes money primarily through API access and subscriptions. The API charges developers per token (roughly per word) for using GPT models in their applications.
ChatGPT Plus costs $20/month for individual users, ChatGPT Team is $25-30/user/month, and ChatGPT Enterprise is custom-priced. Microsoft pays OpenAI licensing fees and also resells OpenAI models through Azure OpenAI Service.
OpenAI reportedly generates over $5 billion in annualized revenue as of 2025, growing at an extraordinary rate.
HOW THEY STARTED
Perplexity AI
Aravind Srinivas grew up in Chennai, India, got a PhD in AI from UC Berkeley, and worked as a research intern at OpenAI and a researcher at DeepMind. He watched the ChatGPT explosion in late 2022 and saw something everyone else missed: AI chatbots were interesting, but AI-powered search was potentially more valuable.
Google search hadn't fundamentally changed since 1998. It still showed you a list of links and made you do the work of reading and synthesizing information.
Srinivas co-founded Perplexity AI in August 2022 with Denis Yarats (ex-Meta AI), Johnny Ho (ex-Quora), and Andy Konwinski (co-creator of Apache Spark). Their idea was an "answer engine" — you ask a question, Perplexity searches the internet in real time, reads the sources, and gives you a synthesized answer with inline citations.
No ads. No SEO spam.
Just answers.
The product launched quietly and grew through word of mouth among researchers, developers, and knowledge workers who were frustrated with Google's increasingly ad-cluttered, SEO-gamed results. Within a year, Perplexity was handling millions of queries daily.
OpenAI
OpenAI was founded in December 2015 as a nonprofit AI research lab. The founding donors — including Elon Musk, Sam Altman, Peter Thiel, Reid Hoffman, and Jessica Livingston — pledged $1 billion with a mission to build artificial general intelligence (AGI) that would benefit all of humanity.
The idea was that AI was too important and too dangerous to leave in the hands of Google alone.
Sam Altman became chairman while Greg Brockman (former CTO of Stripe) became president. Ilya Sutskever, one of the most respected AI researchers alive, left Google Brain to become chief scientist.
The early team was stacked with world-class researchers who published their work openly — hence "Open" AI.
But AI research turned out to be staggeringly expensive. Training large models required millions of dollars in compute.
In 2019, OpenAI created a "capped-profit" subsidiary — investors could earn up to 100x their money, but profits beyond that would flow to the nonprofit. Microsoft invested $1 billion.
The mission was still to save humanity. The method now involved making a lot of money first.
HOW THEY GREW
Perplexity AI
Perplexity grew almost entirely through product quality and word of mouth. The first users were AI researchers and tech workers who shared it on Twitter.
Every time someone used Perplexity and got a better answer than Google, they posted about it. The product was its own marketing.
The mobile app was a growth accelerator. By launching on iOS and Android early, Perplexity captured users who wanted quick answers on their phones.
The app was faster than opening a browser and Googling — one tap, ask your question, get an answer. Mobile usage now exceeds desktop.
Strategic distribution deals expanded reach. Perplexity partnered with SoftBank (default AI assistant on SoftBank phones in Japan), Deutsche Telekom, and various hardware manufacturers to be pre-installed as the default search assistant.
These deals put Perplexity in front of millions of users who had never heard of it.
OpenAI
ChatGPT's launch in November 2022 was the growth strategy — it just wasn't planned that way. The team expected a modest research preview.
Instead, ChatGPT hit 1 million users in 5 days and 100 million monthly active users in 2 months, making it the fastest-growing consumer application in history. The product went viral because it felt like magic — for the first time, anyone could have a natural conversation with a machine that seemed to understand them.
The Microsoft partnership provided distribution at massive scale. Microsoft integrated OpenAI models into Bing, Office 365 (Copilot), GitHub (Copilot), and Azure.
Overnight, hundreds of millions of Microsoft users had access to OpenAI technology. Microsoft's $13 billion investment was the largest AI bet in history and gave OpenAI nearly unlimited compute.
The API created an ecosystem. Thousands of startups built products on top of OpenAI's models — from customer service bots to coding assistants to content generators.
Each API customer locked themselves into OpenAI's ecosystem, creating switching costs and recurring revenue.
THE HARD PART
Perplexity AI
Google is the elephant in the room. Google controls 90%+ of the search market and generates $175 billion annually from search advertising.
Google has responded to Perplexity by adding AI Overviews to search results — essentially copying the answer engine concept. Google has unlimited data, unlimited compute, and the default position on every browser and phone.
Competing with Google for search is historically a death sentence.
The publisher problem is real and litigious. Perplexity synthesizes content from news articles and websites without driving traffic back to those publishers.
Multiple media companies have accused Perplexity of scraping their content and delivering it as answers, depriving them of page views and ad revenue. The New York Times, Forbes, and Condé Nast have all raised concerns.
If publishers successfully block Perplexity or win legal challenges, the product's utility decreases.
Monetization without ads is nearly impossible at scale. Perplexity initially positioned itself as the ad-free alternative to Google.
But $20/month subscriptions can't fund the compute costs of an answer engine serving hundreds of millions of queries. The introduction of sponsored questions signals that pure subscription revenue isn't enough.
Whether Perplexity can add ads without becoming what it set out to replace is the defining question.
OpenAI
The board crisis of November 2023 nearly destroyed the company. The nonprofit board fired Sam Altman as CEO on a Friday, citing a loss of confidence.
Within 48 hours, 95% of employees threatened to quit and follow Altman to Microsoft. By Tuesday, Altman was reinstated and the board was restructured.
The incident exposed the fundamental tension between OpenAI's nonprofit governance and its for-profit ambitions — a tension that still hasn't been fully resolved.
The cost of training frontier models is eye-watering. Each new GPT generation costs hundreds of millions to train.
OpenAI is reportedly spending over $7 billion annually on compute. The company is burning through cash faster than almost any startup in history, which is why it keeps raising at higher and higher valuations.
If revenue growth slows before costs stabilize, the math gets ugly.
Safety concerns are not going away. Multiple prominent researchers have left OpenAI over disagreements about the pace of development versus safety research.
Ilya Sutskever, the chief scientist who was central to the board's decision to fire Altman, left in 2024 to start a safety-focused AI lab. The public debate about whether OpenAI is moving too fast — and whether its safety commitments are genuine — grows louder with every capability improvement.
THE PRODUCTS
Perplexity AI
Perplexity Search is the core — ask any question and get an AI-synthesized answer with cited sources. Pro Search performs multi-step research, asking clarifying questions and digging deeper for complex queries.
Perplexity Pages lets users create shareable research articles from their queries. Collections organize saved searches and threads.
The Perplexity API lets developers integrate the answer engine into their own products. Perplexity recently added Spaces for team collaboration on research projects.
OpenAI
ChatGPT is the consumer chatbot — the product that made AI mainstream overnight. GPT-4o is the flagship multimodal model that handles text, images, and audio.
The OpenAI API lets developers integrate GPT into any application. DALL-E generates images from text descriptions.
Whisper transcribes and translates audio. Sora generates videos from text prompts.
GPT Store lets users create and share custom GPT agents. ChatGPT Enterprise gives businesses a private, secure version of ChatGPT with admin controls and no data training.
WHO BACKED THEM
Perplexity AI
Jeff Bezos, IVP, NEA, Databricks Ventures, Nvidia, Institutional Venture Partners, SoftBank
OpenAI
Microsoft ($13B), Thrive Capital, Khosla Ventures, Sequoia Capital, Founders Fund, Tiger Global, SoftBank, a16z