AI-powered search engine Perplexity has reportedly closed a massive $500 million funding round, valuing the startup at a staggering $9 billion. According to Bloomberg, citing sources familiar with the matter, the round was led by Institutional Venture Partners and closed earlier in December.

This significant investment comes at a time when the competition in AI-powered search is heating up. OpenAI recently launched ChatGPT Search, its answer to Perplexity, and Google is developing capabilities to rival some of what Perplexity offers, including AI-generated summaries and answers on search results pages. The search giant is reportedly planning to take a more aggressive move, potentially building a chatbot-like "AI mode" directly into Google Search, as reported by The Information earlier this week.

Despite the intense competition, Perplexity appears to be pushing forward with its growth strategy. The company has made its first acquisition, snatching up Carbon, a startup specializing in connecting AI systems to external data sources. This move is likely to enhance Perplexity's capabilities and further differentiate it from its competitors.

It's worth noting that Perplexity is currently battling a class action lawsuit over alleged copyright infringement. However, this does not seem to have deterred investors, who are likely drawn to the startup's innovative approach to search and its potential for disruption in the industry.

The $500 million funding round is a significant vote of confidence in Perplexity's vision and capabilities. As the AI-powered search market continues to evolve, it will be interesting to see how Perplexity utilizes this investment to further develop its technology and expand its user base.

The implications of this funding round extend beyond Perplexity itself, as it solidifies the company's position in the increasingly competitive AI search market. As AI-powered search engines continue to gain traction, traditional search engines like Google will need to adapt to stay relevant. This could lead to a significant shift in the search landscape, with AI-powered search engines potentially becoming the new norm.

In conclusion, Perplexity's $500 million funding round is a significant development in the AI-powered search market. As the company continues to innovate and expand its capabilities, it will be important to watch how the search landscape evolves and how traditional players adapt to the changing landscape.