Perplexity Executives Think Ads Will Butcher Trust in AI
Perplexity is abandoning its advertising efforts, cautioning that accompanying chatbot answers with ads could lead users to distrust the product. Ads in AI chatbots are a contentious topic, and there is a clear divide forming as the industry tries to make sense of a still-uncertain road to profitability. Google has shown ads in its AI Mode and AI Overviews features for months now, and while Gemini is still ad-free for the foreseeable future, executives have indicated that it will be a natural next step for the chatbot. Last week, OpenAI began testing out ads in ChatGPT, with CEO Sam Altman claiming that an ads business would make the free ChatGPT offering financially sustainable for the business. For its part, rival Anthropic has not shied away from roasting them for the decision, including with four Super Bowl ads that made fun of ads in AI chatbots and a manifesto promising never to include ads in Claude.
“Including ads in conversations with Claude would be incompatible with what we want Claude to be: a genuinely helpful assistant for work and for deep thinking,” Anthropic shared in a letter earlier this month, adding that even if the ads don’t influence AI responses, they would still “introduce an incentive to optimize for engagement—for the amount of time people spend using Claude and how often they return. These metrics aren’t necessarily aligned with being genuinely helpful.” Perplexity was once one of the first major AI providers to introduce ads into its product, but they are now being phased out as of late last year, and executives seem to have shifted their thinking to align more with Anthropic’s camp.
“A user needs to believe this is the best possible answer, to keep using the product and be willing to pay for it,” an unnamed Perplexity executive said at a media roundtable, per the Financial Times. “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 AI search startup will have to make money somehow, though. Another Perplexity executive said they could revisit ads in the future, but they might also just “never ever need to do ads,” per the FT. That’s going to depend on whether their focus shifts to subscriptions and business sales pan out as expected. According to Business Insider, the company is looking to expand its enterprise sales team and wants to target large businesses, finance professionals, doctors, and CEOs to generate a reliable revenue stream in place of ads.
