Dmitry Shevelenko on Perplexity's Vision for Reshaping the Internet

The news business isn't a great one these days. At least for a lot of legacy outlets (newspapers, cable networks, print magazines etc.), the Internet has obliterated their business model. And now AI is coming along and there's a risk that it makes conditions even worse, because unlike in the glory days of the search era, the user doesn't even have to click to get what they're looking for. So how does an AI company like Perplexity, which combines search and AI to create a real-time destination for learning about the news, affect industry economics? On this episode, which was recorded live at Lazard's Foursquare conference (an annual gathering for business leaders in sports, media, and entertainment), we speak with Perplexity's Chief Business Officer Dmitry Shevelenko. We talk about the company's relationship with the news business, a new battle against Amazon, and the general economic and finance environment for hot AI startups. Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

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• 3:14Joe Weisenthal?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Wasenthal.

• 3:18Tracy Alloway?

  And I'm Tracy Alloway.

• 3:19Joe Weisenthal?

  Today you are going to be listening or watching a special episode of our podcast recorded live at a conference which you've probably never seen before.

• 3:29Tracy Alloway?

  Yeah, this was at the Lazard Foursquare Conference and we interviewed Dmitry Shevelenko. He is the Chief Business Officer of Perplexity, which is something you might have used before. We certainly use it.

• 3:40Joe Weisenthal?

  Yep, one of the leading AI models. And so this is a conference related to media and deal making. And so we talked about what the impact of AI is going to be on news, media, and brands, the internet as we know it.

• 3:52Tracy Alloway?

  We also took questions from the audience, so you will hear us referring to questions that we are receiving on the app. We hope you enjoy. Take a listen. All right, so here's my first question. Should we even be talking to you? What I mean by that is, I could just go on Perplexity and ask all these questions and they'll give me a pretty decent answer. What's the point?

• 4:14Speaker 06

  So first of all, thank you for having me. It's great to be here.

• 4:19Speaker 06

  The, I love that tee up and you guys were scheming backstage of like, what's gonna be the hard opening question? But I love it because the thing that humans will always be uniquely exceptional at is asking questions. So perplexity may have the answer, but perplexity does not have an innate desire to be curious. And that's what you guys have, and that's why journalism is so important, and that's why having these conversations is important. It's about the questions, not necessarily the answers.

• 4:55Joe Weisenthal?

  Kind of related to this, I guess, but here's the thing that I always think about, which is I'm a, I enjoy using perplexity, etc. Let's say, you know, you have great relationships with all the news publishers, etc., and they're really cool with it all, and all those deals get solved, etc. Like, why do we need the internet as we know it that has things called websites built for humans? Now that we're in this age where we can go to a chatbot or something like it, and the answer is right there. Do we need to have what are traditionally called websites anymore? Why would a publisher continue and invest in design and all of these things when I could just get the answer from perplexity or ChatGPT or wherever else?

• 5:37Speaker 06

  So again, it goes back to, I think the reason we're drawn to media properties is because of the questions the journalists and editors are asking, right? It's not necessarily, it's the framing, it is the what is actually worth asking about, what's worth reading about? Perplexity doesn't have answers to that. You have to come to perplexity already armed with a question. And oftentimes, people, you know, read news, and there's something they didn't understand fully, and they come to perplexity to get that deeper understanding. But the spark, that comes from editorial judgment, that comes from the intuition of a world-class reporter.

• 6:17Speaker 06

  And that's why we're excited through, you know, programs like Comet Plus to find new business models for that.

• 6:24Tracy Alloway?

  How do you actually judge editorial judgment or quality of news sources? Because I can imagine a future where a lot of our news consumption is through something like a perplexity model, which means that you're basically the arbiter of what information is reliable. So how do you make those decisions?

• 6:42Speaker 06

  It's not me at the wheel. Ultimately, this is where we focus a big part of our technology. It's building accurate AI. The thing that we believe is that's going to be most scarce in the future is not intelligence, it's trust. I think the bedrock of trust is transparency. That's why perplexity pioneered showing you exactly which source the information is coming from and empowering users to apply their own judgment of whether that is a good source or not so good source. But we deploy many different algorithmic strategies.

• 7:21Speaker 06

  Oftentimes, if many publications are saying the same thing, that's a strong signal that they're on to something and the outliers you're kind of more sensitive to. But this isn't, it's not a simple problem and this is why we raise a lot of capital and hire the world's best technologists to build accurate AI.

• 7:41Joe Weisenthal?

  So I think anyone could sort of intuitively understand why publishers might be anxious about perplexity as being a destination. Evidently, it's not just news publishers. Literally, since we got on stage three minutes ago, news broke that Amazon demands perplexity to stop AI agent from making purchases.

• 8:05Joe Weisenthal?

  It just broke three minutes ago from Bloomberg. What is the...

• 8:07Speaker 06

  Good job Bloomberg.

• 8:08Joe Weisenthal?

  Clearly, it's not just news that's anxious about the idea of perplexity being the destination. Clearly, it's all kinds of businesses.

• 8:15Speaker 06

  So I think, and I haven't read the article yet.

• 8:19Joe Weisenthal?

  You want me to read it out loud?

• 8:21Speaker 06

  I think I have an understanding of the issues. Ultimately, the issue with Amazon is tied to perplexity's web browser called Comet. And Comet is a web browser that has an AI assistant built into it. And what we think is important is that consumers and end users have access to powerful AI when they are accessing publications, accessing websites, accessing the internet. The first 30 years of the internet, we had lopsided AI, where big tech, you know, Google, Netflix, Facebook, they used AI to control what we see, to get us to click on certain things and not click on other things.

• 9:05Speaker 06

  And what is changing now is perplexity is focusing on giving powerful AI to the end user. And we think this is the right thing to do. We think it's a principled viewpoint that when you're on Amazon, it's not Amazon's business whether you're using AI to help you evaluate, is this the best thing to buy? You know, can I find it cheaper somewhere else? Do I actually need to buy the other thing they're telling me to buy with it? The world's wealthiest people, they have personal shoppers that help them do this. And we're democratizing that sort of intelligence, that sort of assistant access to everyone.

• 9:40Tracy Alloway?

  Just in terms of competition, is the argument basically that technically, you know, a Google or an Amazon could create similar products to what you guys are doing, but their own business model basically prohibits them from doing what you're doing?

• 9:55Speaker 06

  I should have you join our next investor pitch. It's exactly that.

• 9:58Tracy Alloway?

  Oh dear.

• 9:59Speaker 06

  It is, there is a big opening for an independent, neutral AI player that is aligned with users. You know, Google is still, you know, they're generating, you know, 100 billion in revenue per quarter, which is amazing. But a lot of that is coming from getting, you know, their customers advertisers. You know, Amazon, they're trying to get you to buy as many things as possible. Our success metric is, do users, are they willing to pay for a perplexity subscription? And so we're purely aligned with our users.

• 10:38Joe Weisenthal?

  Speaking of competition, like what is the differentiator? Okay, maybe Amazon has some obvious angles and some of the others. OpenAI seems sort of independent in the same bucket. It's really huge. It's one of the biggest websites in the in the world. It doesn't strike me many of the things that they offer replicate seems sort of similar to perplexity. You must get this, I know you probably have a stock answer this, but what is the differentiator between you and an OpenAI?

• 11:08Speaker 06

  So, you know, I'm fortunate to get to speak with a lot of curious people that have to answer a lot of hard questions every day. And they're, they tell me they use perplexity. And it comes back to we're focused on accuracy above all else. ChatGPT is an amazing product, but they built a product that is optimized for engagement. It's trying to be your cheerleader, your coach. It's trying to get you to to keep going. And they've also built a product that is designed not to use the best LLM in service of your question, but it's designed to use their LLMs.

• 11:49Speaker 06

  And so part of being neutral, part of being independent, trustworthy, accurate is using the best possible technology to answer the question the best possible way. And so being an aggregator of all the best models, having our own independent search infrastructure that isn't the Bing search API, which is what ChatGPT uses. Those are all the building blocks of a more useful, accurate AI.

• 12:13Tracy Alloway?

  What's your actual revenue source at this point? Because I know you're big on subscriptions. You experimented with ads. I think you might have paused that at this point, but it does seem if you're trying to be different to Google, you probably don't want to be as ad driven as they are.

• 12:28Speaker 06

  Yeah, so we're seeing tremendous traction with both consumer subscriptions and then companies buying the enterprise version of Perplexity for their employees. Ultimately, it's in that enterprise context where having accurate, useful knowledge is incredibly valuable. And so we've had, you know, been fortunate with a enterprise go-to-market team of just five people, you know, seeing that business, you know, more than 8x this year, seeing, you know, many multiples increase in our consumer subscriptions. And we're excited about building products that are user-aligned, that also create marketing value for brands and advertisers.

• 13:12Speaker 06

  But this isn't going to be rebuilding AdWords and click-based systems. We think it's important to create real value so that when your personal AI agent powered by Perplexity is evaluating a potential commercial opportunity, something you might buy, imagine, you know, alongside the answer, you got an offer for an exclusive discount. That would be something that your agent would say, hey, this is, even though someone's paying for this to show up here, this is actually a good deal. If it's just an ad that says, click me, click me, click me, we don't think that's going to be sustainable, and that's not the type of marketing products we're looking to build.

• 14:05Tracy Alloway?

  There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

• 14:32Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and

• 15:14Speaker 01

  hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

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• 16:48Joe Weisenthal?

  Can we talk a little bit about the fundraising environment for AI? I mean, obviously, we know how crazy, you know, intense things are in the

• 16:55Tracy Alloway?

  Are people throwing cash at you as you walk down the street?

• 16:58Joe Weisenthal?

  But also, it feels like every day, like, I, like, it used to be when I paid attention to startups, it felt like there were discreet rounds. There was a C, then an A, and then a B, and then maybe a C, and then an IPO. When I read, it feels like every day, there is just, are the, are the rounds blending into each other so that it's just this sort of ongoing stream of, oh, here's a new raise, etc., here, we got some new chips, and then we are giving them some equity, etc. Has the, has the line between rounds, is it blurring?

• 17:25Speaker 06

  Yeah, so before Perplexity, I mean, I spent most of my career at consumer internet companies, but a stint as a founder of a robotics startup. And AI is definitely a different fundraising environment than that was, which was very challenging. I, I think at its core, a lot of investors believe, and we agree with this belief, that what's happening with AI now is as profound as the original introduction of the internet. And so there, there are going to be a wave of new generational companies that are being built right now. And, you know, a lot of the value is actually, you know, compounding while these companies are privately held.

• 18:07Speaker 06

  And so that, that is, you know, there, there's a lot of conviction by, by private investors in that. And I think a second piece is that investors themselves are power users of products like Perplexity. They are people that have a lot of questions, do a lot of research. And so they have not just an abstract understanding of a balance sheet, they have their own intuition, you know, which is very different than like B2B SaaS, where it's like, you know, you have to go do 30 customer interviews, and you're, you're kind of getting all the second order information. You know, with Perplexity, use it yourself, you, you understand the value, the time that you just saved, the creative expansion you just had, and, and that gives investors conviction.

• 18:51Speaker 06

  And, and so that, that is, you know, fueling this environment. Is it at times, you know, too frothy? Sure. You know, are there going to be some investors that, that make the wrong bets? Absolutely. But the core human need of getting good answers to good questions, you know, we, we think that is boundless and, and so we're, we're confident in, in the path ahead.

• 19:18Tracy Alloway?

  Well, speaking of froth, is there anyone you turn away in terms of being an investor?

• 19:23Speaker 06

  Yeah, so there's this phenomenon that, that tends to happen in, in bubbly periods of multi-layered SPVs. So SPVs are special purpose vehicles. And so you, you basically have many layers of outsourced fundraising where you have, you know, principal agent misalignment, where the fundraiser is not making money off the investment, they're just making money off the management fee. And so we often get approach from players in that space and we, you know, as whenever we can detect that's what it is, we, we avoid taking on funds like that because we want investors who are getting direct access to perplexity and who are in it for the long haul, who aren't just trying to make a quick

• 20:08Speaker 06

  buck on, on a management fee flip.

• 20:10Joe Weisenthal?

  I am, I want to talk about this more. I'm really fascinated. We actually, we did an episode with Vla, kind of the Robin Hood CEO, and he was talking about tokenization of private assets. And I guess this sort of actually relates to the question about discrete rounds. But does it feel like, you know, in theory, if some sort of slice of equity perplexing, maybe people sell forwards or these vehicles that are linked to it, does it feel like the line between what it even means to be a private and a public company is inevitably going to disappear, especially add in the fact that we seem to be on this road where public companies will not be expected or required to have to report information as timely as they used to?

• 20:51Speaker 06

  I think it's important when you're a privately held company to control the sale of your equity. And I think that the challenge, you know, why we haven't, you know, we've been approached by a lot of these tokenization schemes. And, you know, again, if you, if you have folks on your cap table that are not aligned for the long term, they may be looking for quick flips and then that creates a weird signal in the market and that may harm, you know, a primary raise, right? And so the, the noise that comes with that, it's not like we're short on other, you know, investment, you know, avenues. So it's just an unnecessary kind of noise risk.

• 21:32Tracy Alloway?

  So, speaking of throwing money around, the $35 billion bid for Chrome, what was that? Was that a troll?

• 21:44Speaker 06

  We, that was, when we made that bid, the DOJ had still not decided whether Chrome would be divested from Google. The web browser, as evidenced by, you know, Amazon's behavior, is clearly incredibly valuable surface area. And that, you know, 35 billion was a starting bid. You know, at this point, I can safely say I think Chrome is worth more than that. But what I can confidently say is, we had more than 35 billion of investor interest in making that bid. So it was not a constraint on, you know, the funding side. Obviously, Google does not want to sell Chrome unless they will be forced to, and it doesn't look like the government will be forcing them.

• 22:29Tracy Alloway?

  So you're serious about that one? It's not just a sort of antitrust flag-waving exercise?

• 22:34Speaker 06

  No, we had, you know, very large sovereign wealth funds that, you know, were, were kind of lined up and ready to go.

• 22:42Joe Weisenthal?

  Here's a great question from someone anonymous via the app. Can you talk about unit margins? You often hear this, it's like, oh, these AI companies, they're not even on a unit basis making money, given the compute costs, et cetera. Are, what, can you talk about gross margins and right now, whether like, you know, a given query is profitable, given the cost of delivering?

• 23:05Speaker 06

  So the, a paying pro subscriber to Perplexity is profitable for us.

• 23:12Joe Weisenthal?

  Okay.

• 23:13Speaker 06

  So the unit margins are strong. The, you know, free users right now, because we do not monetize them, you know, we don't, you know, we lose money on those. AI companies, I think something that is underappreciated, they generally actually, when they do the accounting of free users, they attribute that to research and development, because you're still using those prompts to improve and train your system.

• 23:40Joe Weisenthal?

  We're training the model.

• 23:41Speaker 06

  So, you know, it does allow for your unit economics to potentially appear more pristine than they are.

• 23:48Joe Weisenthal?

  Are all pro-users profitable? Because this also strikes me as something unique with AI, which is that... You know, and back when Twitter was in its infancy, power users were good. It feels like in the case with AI, sometimes you get these power users where you're losing money on them. Are all pro users profitable or do some use it so much that it's more than the subscription fee?

• 24:06Speaker 06

  I mean, I, I, I don't, it's not a material amount. And we've also introduced a max tier. Uh, so we have a $20 a month pro subscription. And for the folks that want, you know, the most expensive reasoning models and, and higher limits on them. There's a $200 a month product called Max, and that also gets you access to our email assistant. Uh, and so I think you'll, you know, and other companies have also introduced kind of higher tiers of subscription. So this is not a problem that's unique necessary to AI. And, and you kind of introduced tiers of service, uh, to, to support it at scale.

• 24:41Tracy Alloway?

  What does your expenditure actually look like at this point? Like, what are you spending the most money on? Is it, we read about these insane salaries for engineers going to Claude or OpenAI or whatever. Is it talent retention or is it compute power? Is it the content deals with media organizations? What are you spending on?

• 25:01Speaker 06

  So the, the biggest expense is inference, right? So it is the, the cost of compute, uh, when you're, you're asking a question and, and running, uh, it through a LLM. You know, that, that is, uh, that is a material expenditure. Uh, we, you know, perplexity doesn't do pre-training. Um, so the sorts of AI PhDs that other companies are, you know, paying, you know, uh, reported hundreds of millions of for. Uh, we're not, that, that's not, we're not in the market of that. We have incredible AI application engineers and that's, that's what we recruit for. Ultimately, engineers that are joining perplexity are joining because they believe we're just getting started. Right. And they're coming for an equity appreciation story.

• 25:46Speaker 06

  Uh, that's, you know, already bearing fruit, uh, but we're, we're just at the beginning of that journey.

• 25:51Joe Weisenthal?

  Maybe this is sort of a way of restating Tracy's question, but it all feels like in any AI conversation. It's like, what is the bottleneck right now, right? Is it talent? Is it capital? Is it compute? Is it power, et cetera? Like, if you could have unlimited amounts of any one of those things, what would you want more of right now?

• 26:12Speaker 06

  So I think it's important to bifurcate. There is the companies that do the training of foundation models and those are the ones that are really pushing for the massive infrastructure build outs. Yeah. We're not constrained on compute for inference. Okay. At the current usage levels, but as you know, behavior shift, I mean, by a show of hands in the room, like, how many people have stopped primarily using Google when they have an informational question? So, you know, about what 80% of the room, you know, raised their hands and we see the early adopter behavior in, you know, audiences like this, you know, folks that work in financial services, people that, again, for whom quickly getting high quality information matters.

• 26:57Speaker 06

  As, you know, this behavior becomes more mainstream, we obviously will need more compute for inference. But the, the folks that are, are kind of talking about trillions of dollars in investment, it's, it's really a different universe than ours. I, it's unclear to me why some of those investments are needed. Sometimes it feels like a strategy of, you know, kind of what, what the US was trying to do with the Soviet Union of just getting your, your competitors to go broke by, you know, being able to raise the most capital and we'll see how that plays out.

• 27:34Tracy Alloway?

  Since you mentioned financial services, we have a good question from the audience. We've done some media naval gazing. I'm sure we're going to do some more, but for now, financial services naval gazing. What do you think the impact of AI will be on places like Lazard and other Wall Street firms?

• 27:52Speaker 06

  I, I just think this is going to be a incredible flowering of creativity and productivity lift.

• 28:01Speaker 06

  I, I think of using a product like perplexity and other AI tools in, in the day to day of, of somebody that works in an investment bank is really twofold. The first is saving you 80% of the time to get to the 80% first draft of a work product, right? And investment banks, that's, that's kind of putting the other pitch decks, doing model Just gaining tremendous efficiency. And it's not, it's important to distinguish, it's not about making that workflow autonomous. You still absolutely need human judgment on, you know, what the end output should be, how to approach it. This is, this is not about replacing investment bankers. It's about giving them tremendous leverage.

• 28:40Speaker 06

  I think the more disruptive impact is now that it got a lot easier to begin a new initiative, to begin a new prospect. How many more new engagements are you going to be able to spin up? Right? Because the biggest constraint on new business is an employee feeling they have the bandwidth to take it on. And, and, you know, experienced leaders now have much more leverage. And I think that's going to play a profound role at Lazard. And, you know, part of why I'm excited to be part of the organization.

• 29:30Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 30:12Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at ChatGPT.com.

• 30:53Speaker 02

  The world of business is constantly evolving. Every day, new challenges, new opportunities, new ways of working. Comcast Business keeps you totally in step with secure AI-backed networking built to power the way modern business gets things done today in more than 100 countries around the world. That's some serious muscle. And get this, Comcast Business powers over 90% of the Fortune 500 and millions of small businesses. Behind it all? Network engineers, cybersecurity specialists, support teams, thousands of experts answering your call at 2 a.m. like it's 2 p.m. Always on, always ready. That's a lot of coffee. One partner powering how business gets done

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• 32:44Joe Weisenthal?

  I love these audience questions because they're saying things that I would think that reminded me and that I would have been rude to say you didn't answer the first question about are you gonna kill journalism but someone says you didn't answer the first question how would journalism survive when AI has skinned it I get oh yeah you know AI isn't interested in asking questions but it's not the question is like why would brands continue to like build out these presents for like a human reading and scrolling when I can just go to one destination that doesn't necessarily click me anywhere else

• 33:17Speaker 06

  Well, I mean, when I look at the earnings numbers for the Wall Street Journal, the New York Times, for Bloomberg, media companies seem to be doing fine.

• 33:27Joe Weisenthal?

  Well, New York Times is doing well for games and I don't know if you get earnings numbers for Bloomberg.

• 33:31Speaker 06

  But what I hear, you know, like some subscription numbers, but

• 33:35Joe Weisenthal?

  By the way, New York Times is doing a lot more than games. I actually did not, it's a very impressive company, but by and large, it does not look like the actual news business.

• 33:43Tracy Alloway?

  It's a lifestyle company.

• 33:45Joe Weisenthal?

  Is doing particularly well.

• 33:46Speaker 06

  Well, but I think it's part of the value of the bundle. I mean, to me, this is very, this is very analogous to when the internet was first introduced, you had traditional brick and mortar retailers and the best brick and mortar retailers adapted to the digital environment and the best publishers are adapting and gaining leverage with AI. I mean, last night, we had the CEO of Axel Springer talk about how he's leaning into AI and it's actually an incredible opportunity for productivity. And so I don't think this is zero sum. I do think there's going to be some publishers that thrive and others and the media business

• 34:29Speaker 06

  was already facing challenges, you know, certain segments of it well before AI. So I don't see this as being kind of the fundamental tension.

• 34:39Tracy Alloway?

  But if you fast forward five or 10 years from now, what is the front page of the internet actually look like to you and what exactly is, I guess, the economic pact between media and platforms such as yourself? What would the ideal pact or agreement actually look like? Like how, basically, give me your vision of the internet in five years.

• 35:00Speaker 06

  We're introducing something called Comet Plus, which we already have the Washington Post and Conde Nast, LA Times, many great publishers signed on for. And it was really inspired by Apple News Plus, where if you are a Comet Plus subscriber, which is $5 a month, and we bundle it into Perplexity Pro. So even people that didn't necessarily want to pay for it, we're taking money out of our cut and feeding it into this program to seed it. As you consume premium content in the Comet browser, we're then sharing that revenue back proportionally with publishers. And it's actually accounting for not just page views of premium content, but agent actions on that content and citations in the Comet

• 35:45Speaker 06

  browser. And so ultimately, I think subscriptions are a very powerful business model for media. I think there's a lot more to do there, and we want to play a leading role in doing that.

• 35:58Joe Weisenthal?

  I'm very impressed by the finance module within Perplexity. You know, there's a whole graveyard of companies that have tried to take down our employer at Bloomberg. Do you see yourself as a potential challenger company? Tracy asked about, you know, financial services, etc. Do you see yourself at some point down the road as a challenger to the terminal?

• 36:22Speaker 06

  Yeah. I mean, how many people have access to Bloomberg Terminal? It's like, I mean, you guys, like, it's not millions, right?

• 36:29Joe Weisenthal?

  It's not millions.

• 36:30Speaker 06

  Yeah, it's not millions. So for us, the success of Perplexity Finance is, it's similar to what I was saying about with Amazon and people that have personal shoppers. Like Bloomberg Terminal is that. Like, this is like...

• 36:41Joe Weisenthal?

  But we know it's very lucrative, and we know it's a very big company. And so when you're thinking about the Lazard's of the world and all the other banks, could you at some point see yourself pitching Perplexity or a Perplexity Terminal as where all these other ones had failed to do it?

• 36:54Speaker 06

  I think for us, the bigger opportunity We won't be offended if you say that. The bigger opportunity is not to go after Bloomberg Terminal. It's giving everyone who can't afford Bloomberg Terminal a version of it that is useful for them. And when they're making retail stock investment decisions, when they're understanding the interplay of the markets and the news cycle, that they have access to powerful technology, right? So it's not, I don't think we can't like Bloomberg Terminal, like people are there for the chatting. Like, there's all kinds of features there that we're not trying to replace. Thank you. And it's an amazing product and amazing brand. I think it's for us, this is about democratizing, expanding the scope of who has access to premium financial intelligence.

• 37:39Tracy Alloway?

  Another question from the audience. This one's from Olivier Chastain. What do you think will be the key skill sets for media entertainment executives to manage the impact of AI on content industries?

• 37:54Speaker 06

  I mean, I think my answer to this is the answer, I think it's a key skill set for any professional in the age of AI, is you have to get really good at asking the right questions. And so that means asking your teams, why are they working on what they're working on? What's the leverage? What's the unique differentiation? And so it is approaching their business with a profound curiosity and an understanding that, you know, there are new disruption and leveraged opportunities and to kind of lead with that curiosity.

• 38:28Tracy Alloway?

  Everyone always says that, but what does a good prompt actually look like to you? Can you give us a specific example of like a prompt that really impressed you?

• 38:35Speaker 06

  I think to me, asking a good question, it's like a level deeper than like the prompt engineering is kind of that in some ways will get abstracted very soon. When I say asking good question, it means a question that embodies and embeds all the known knowledge on a given topic. And the question you're asking is then, you know, where do you push the frontier? Like, what is the thing that is not yet knowable that in your question, you're pushing your organization on?

• 39:05Joe Weisenthal?

  You know, going back to the browser question about the bid for Chrome. Google itself, earlier this year, there were a lot of people like, oh, Google is going to get disrupted by AI. It's a classic innovator's dilemma. They invented all this tech and they're not making. Now, the stock market views Google's done phenomenally, or Alphabet. They've done phenomenally well and a lot of people have really changed their tune on them. If the browser is such an important part of the real estate here, does that just give them a massive leg up? I mean, I know you're going to launch, have your own and OpenAI is going to have its own, but Chrome is everywhere. Like, how, that sounds like a very big moat.

• 39:43Speaker 06

  It's a very powerful distribution leverage point. But their greatest strength is also a weakness in that they built it around a AdWords system where they're reliant on people clicking on links. And the behavior of clicking on promoted links will just matter less in the future of the internet than it has in the past.

• 40:04Joe Weisenthal?

  Speaking of promoted links, this is another question I've been wondering about. Sometimes I see these companies and they advertise on LinkedIn and they offer what I think is sort of would be the equivalent of like, the AI equivalent of SEO. Is that all snake oil? Is there like, does that exist? Can, are there these games that publishers or any brands can play to do well on AI? Or is that sort of a fraud?

• 40:27Speaker 06

  I don't want to call it a fraud. I have not uncovered. Those companies provide analytics, but they are not actionable. And so I have not found an actionable output there. And in some ways, our purpose is to prevent those insights from being actionable. Because if you can game a perplexity answer, it means it's not accurate and trustworthy. And so, you know, if they do find a hack, like, we have better engineers that will fill that hack.

• 41:01Tracy Alloway?

  I have a slightly philosophical question, but is there any way to inject a tiny bit of randomness or creativity in some of perplexity's output? And what I mean by that is, I think at this point, we're all aware of algorithmic content moderation, and the idea that if you start your Netflix account and you watch one romantic comedy for the rest of your life, Netflix is going to be throwing, like, Matthew McConaughey films at you forever and ever and ever. How do you deal with that aspect of it? The risk that people are funneled into, like, one particular answer stream or one corner of the internet?

• 41:39Speaker 06

  So, memory will be an important feature of products like perplexity, and the way we avoid that trap is transparency, just like we do with sources, where we actually show you all of the things that we've added to your memory, and if you don't want to be pigeonholed as a romantic comedy lover, you just delete that memory. And, I mean, I'm kind of, I recently got into health supplements, and now every time I ask about health supplements, my decision to begin, you know, pomegranate supplements is getting mentioned in the answer.

• 42:12Joe Weisenthal?

  Oh, I hate that.

• 42:13Speaker 06

  Yeah, and I, you know, I deleted that because I'm like, you know what? I don't want it, like, coming back to the pomegranates, as great as they are. And that was, you know, that, I just went and deleted that memory. I saw where it was, and, you know, I'm pomegranate-free in my answers.

• 42:34Joe Weisenthal?

  There's a question here about, let's see, but the comparison to the first wave of the internet. So, this person is talking about content creation, AI agent studios, pace of change, moving very fast. I mean, is decision, what's really extraordinary to me about the last several years is the speed with which we seem to get new paradigms, right? Blogs were going to be a big deal, that was 20 years ago. They had a lifespan of a few years. Then, you know, social media, Twitter, et cetera, their speed. How do you think about, things get overturned so fast these days? How do you think about making investment decisions under such conditions of uncertainty?

• 43:12Speaker 06

  Yeah, this is a funny time to drop his name, but this is where we love the Jeff Bezos line of, you know, it's the hard thing to predict is not what's going to change, but what's going to remain the same. I think from our vantage point, the bedrock is accuracy and trust, right? And that's actually, as intelligence gets much more powerful, it gets more powerful at manipulating us. And so that's why kind of that trust bedrock is paramount. That said, one of my management mantras is that I have absolute conviction that six months from now, I'm going to have a top three priority that today I don't know

• 43:55Speaker 06

  what it is. And that embedded in that is an understanding that even the model makers themselves, when they release a new model, until it's out, they don't know what emergent capabilities and what the useful applications of that will be.

• 44:10Speaker 02

  Yeah.

• 44:10Speaker 06

  And so kind of, you know, having core foundational principles, while at the same time preserving agility and adaptability, and being the best at applying the new gifts we get for the service of users, that's going to be a key operating skill.

• 44:26Tracy Alloway?

  There's a second part of that audience question that Joe just asked, and I think it's probably the one that's on all of our minds, and it's the bluntest one, but is AI in a bubble?

• 44:36Speaker 06

  There are certainly parts of it that are.

• 44:40Tracy Alloway?

  Not you, obviously, but your competitors presumably.

• 44:43Speaker 06

  I mean, I think of all of the time and leverage that professionals and knowledge workers are getting, and I, to me, the ROI on that, like, I can see the trillions of dollars in economic productivity happening from it. But are there certain companies that have just raised too much capital and is going to create imbalances in the ecosystem? Yes.

• 45:08Joe Weisenthal?

  All right, but we only have 45 seconds. My issue is a lot of things still don't work in AI. I tried to ask ChatGPT yesterday, how many full school weeks there are in New York City public schools. It was like, oh, I'd have to count it by hand. And no, it seriously said that. I posted a screenshot of it. A lot of these agent things like they don't work very well. Like much AI, like a lot of things. I once asked, who are the most common guests on Odd Lots over the years? It just gave me a bunch. This was not your site, but I'm just saying like, a lot of AI agents and so forth, they sort of [bleep] out halfway through.

• 45:40Speaker 06

  Yeah. I'm tempted to do a live check of whether perplexity would give you a good answer on that. But the, this goes back to what I was saying about emergent capabilities. The fail case, and this comes up actually in many enterprise conversations, is just because you tried something two months ago.

• 45:57Joe Weisenthal?

  Yeah.

• 45:57Speaker 06

  It doesn't mean, and it didn't work, doesn't mean it's not working today. And so we all need to keep this open mind that these technologies are getting smarter and better at a rapid clip. And, you know, those are solvable problems.

• 46:11Tracy Alloway?

  All right, Dimitri, thank you so much for

• 46:13Speaker 06

  Thank you.

• 46:14Tracy Alloway?

  having this conversation. Really appreciate it.

• 46:31Joe Weisenthal?

  That was our conversation with Dimitri Shavelenko, Chief Business Officer at Perplexity.

• 46:35Tracy Alloway?

  Shall we leave it there?

• 46:36Joe Weisenthal?

  Let's leave it there.

• 46:37Tracy Alloway?

  All right. This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 46:42Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our guest, Dimitri Shavelenko. He's at Dimitri140. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashil Bennett at Dashbot, and Kale Brooks at KaleBrooks. For more Odd Lots content, go to Bloomberg.com/oddlots, where the daily newsletter and all of our episodes. And you can chat about all these topics 24/7 in our Discord, discord.gg/oddlots.

• 47:06Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we do these live recordings, please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

• 47:56Speaker 08

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