Perplexity, a prominent player in the AI landscape, has announced its acquisition of Carbon, a small Seattle-based startup specializing in connecting AI systems to external data sources. This strategic move is expected to enable Perplexity to search through files and work messages in popular enterprise applications like Notion, Google Docs, and Slack, starting early 2025.

Carbon's expertise lies in retrieval augmented generation (RAG), a technology that allows large language models to access information from external databases before generating an answer. By integrating Carbon's technology and staff, Perplexity is poised to launch enterprise search products that connect generative AI to enterprise databases. This development will enable employees to quickly search through the vast amounts of unstructured data accumulated by their companies over the years.

According to Perplexity, the acquisition of Carbon will make it easier for its answer engine to be informed by diverse sources of information, whether that data resides in internal databases, cloud storage, or document repositories. This enhanced capability will significantly improve the accuracy and relevance of search results, making Perplexity's AI search products more attractive to enterprises.

The acquisition of Carbon marks Perplexity's second strategic move, following its 2023 acquisition of Spellwise, whose CEO was brought on board to develop Perplexity's mobile app. This latest acquisition underscores Perplexity's commitment to expanding its AI capabilities and strengthening its position in the competitive enterprise search market.

The enterprise AI search space is rapidly heating up, with OpenAI, Google, and other AI giants reportedly developing their own enterprise search products. OpenAI, in particular, has been inspired by Glean, the current front runner in enterprise search, and has told investors in its latest $6.6 billion round that they cannot also invest in Glean. This intense competition is driving innovation and investment in the AI search space, and Perplexity's acquisition of Carbon is a significant move in this context.

As the AI landscape continues to evolve, Perplexity's acquisition of Carbon is a strategic bet on the future of enterprise search. With its enhanced capabilities, Perplexity is well-positioned to capitalize on the growing demand for AI-powered search solutions in the enterprise sector. As the company prepares to launch its enterprise search products in early 2025, the industry will be watching closely to see how this acquisition plays out in the market.