Why Perplexity Just Killed Its AI Ads Despite an $18 Billion Valuation
2 min readNew DelhiFeb 19, 2026 08:35 PM IST
Perplexity, in a rather surprising turn of events, has boarded the anti-ad AI bandwagon. The AI startup says it has reversed the decision to show ads in its chatbot as it might erode user trust.
This is an interesting U-turn for the startup, as it was one of the first generative AI companies in the world to start testing ads back in 2024. These sponsored ads appeared below the chatbot’s answer.
According to the Financial Times, Perplexity had reportedly started phasing out ads late last year, with executives now saying that they have no plans to show ads, at least for now.
“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 told the publication.
While Perplexity’s ads were labelled as sponsored and had no effect on the chatbot’s response, an executive said 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.”
“We are in the accuracy business, and the business is giving the truth, the right answers,” another Perplexity executive told the publication.
With a valuation of around $18 billion, Perplexity reported it earned $200 million in revenue. While most of its money comes from subscriptions, it offers free services as well.
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In the last few months, leading generative AI services have been following in Perplexity’s footsteps and have started to show ads in an effort to appease investors as they ask for more money and try to sustain the running costs of data centres that power these large language models.
While OpenAI has started showing ads for users who are on ChatGPT’s free tier, Google is showing ads in AI mode and AI Overviews. However, the company is yet to show ads in Gemini, its in-house AI chatbot.
Like Perplexity, Claude developer Anthropic said that it will also try to keep its AI chatbot ad-free.
