By DIGIT Editor
Publication Date: 2026-02-18 10:31:00
AI startup Perplexity has stepped back from advertising amid concerns that sponsored content could undermine user trust, even as rival firms press ahead with ads in a bid to turn the eye-watering investment into genAI to something monetisable.
The San Francisco-based company was among the first AI developers to trial advertising in 2024, testing sponsored answers that appeared beneath chatbot responses. However, Perplexity – which also operates a paid subscription model – began winding down those ads late last year, and, as first reported by Business Insider, executives confirmed on Tuesday at a roundtable with reporters that it has no plans to pursue advertising further.
“A user needs to believe this is the best possible answer, to keep using the product and be willing to pay for it,” a Perplexity executive said, according to Business Insider.
While Perplexity said its ads were clearly labelled and had no influence on chatbot responses, the executive added that “the challenge with ads is that a user would just start doubting everything . . . which is why we don’t see it as a fruitful thing to focus on right now”.
The move comes as leading AI groups experiment with advertising to generate revenue from free users and reassure investors, as companies continue to burn through cash training and maintaining large language models.
OpenAI last week began testing ads for non-paying users, emphasising that sponsored…
