Perplexity’s Retreat From Ads Signals a Bigger Strategic Shift

Perplexity is abandoned plans to place ads in its AI search product as the industry looks for sustainable business models that won't damage user trust. The changes are part of a larger strategic shift for the company, which has long focused on disrupting the Google Search business.

“Google is changing to be more like Perplexity than Perplexity is trying to absorb Google,” a Perplexity executive said at a press briefing on Tuesday. Drivers spoke to the press on condition of anonymity.

Instead of chasing mass adoption, Perplexity will adopt in its subscription business, with a focus on becoming the most accurate AI service for developers, businesses and consumers willing to pay a monthly fee. The company also plans to make partnerships with device makers a bigger part of its business moving forward.

The move marks a big change for the company, which was one of the first AI companies to start experimenting with advertising in 2024. CEO Aravind Srinivas said on a podcast that year he predicted that ads would eventually be the company's core monetization engine. “I think we can be really, really profitable with advertising,” he added.

Now executives say they are changing course because ads may make people suspicious of Perplexity's responses. Anthropic offered a similar explanation for not placing ads in its chatbot, Claude, and poked fun at ChatGPT's ads in a Super Bowl commercial earlier this month.

But there may be other reasons why Perplexity does not pursue advertising.

Early investors in Perplexity once believed the startup could reach hundreds of millions or even billions of users, but the startup's growth has not met expectations, according to a source close to the company. When the startup raised its Series B funding in 2024, board member and investor Cack Wilhelm said in a blog post that Perplexity was “capable of bringing the power of AI to billions.” Two years later, that goal still seems far away.

Data from third-party analytics firm Similarweb suggests Perplexity had just over 60 million monthly active users on its website and mobile app in January. That's more than double the users Perplexity had last year, according to Similarweb. People also now have access to Perplexity through its AI-powered browser, Comet, which Similarweb doesn't track.

A source close to Perplexity says the agent in its Comet browser reached 2.8 million weekly active users (who were also Perplexity subscribers) in December 2025, down from a peak of 7.8 million WAUs earlier in the year.

Excluding Comet, Perplexity's web and mobile user base is less than 10 percent of OpenAI's ChatGPT and Google's Gemini, which have 800 million weekly active users and 750 million monthly active users, respectively.

“One of the things that is starting to become clear to us is that Perplexity is not for everyone,” another Perplexity executive told the press.

Advertising has been a strong business for companies like Google and Meta because they have hundreds of millions of free users. Without that scale, ads are likely to become a less appealing business model.

Perplexity says it makes hundreds of millions of dollars in revenue, mainly from consumer subscriptions, but it increasingly expects growth to come from enterprise sales.

The AI ​​search startup also appears to be making a more concerted bet on powering other AI services in 2026, with plans to hold its first developer conference later this year. The company's pitch is that Perplexity can be an orchestration layer on top of AI models from OpenAI, Google, and Anthropic, directing user queries to the best model for a given question.

Perplexity said it has no plans to get rid of its free tier at this time, despite pulling back ads. One way the company hopes to keep products available to free users is through partnerships, such as the one it has with Motorola, where Perplexity comes pre-installed on consumer devices. Executives suggested that more device manufacturer partnerships could be on the horizon.