Japanese tech investment firm SoftBank Group Corp’s Vision Fund 2 will invest between $10 million and $20 million in U.S. search startup Perplexity AI, Bloomberg News reports. The funding values the artificial intelligence-powered Google search alternative at $3 billion, it said.

Also read: SK Telecom and Perplexity partner to offer AI-powered search engine

SoftBank’s investment is part of a larger $250 million funding round that increases Perplexity’s valuation by 300%, making it one of the AI sector’s highly valued firms, the report said, citing people familiar with the matter. The deal hasn’t been finalized and its terms could still change, it added.

SoftBank plans to increase AI investments

Perplexity AI works like a search engine, only its AI-powered. It can hold conversations and provide simple to nuanced answers to user queries. The chatbot can cite sources it used to generate responses to user prompts, and then aggregate those sources – giving users a chance to judge whether responses are credible or not.

Powered by several large language models (LLMs) like Meta’s Llama and OpenAI’s GPT4, Perplexity AI combines information from several top web results for its answers, not just a list like what appears on Google. It provides a list of related queries below every answer. An answer to any of the suggested queries can be generated instantly with a single click.

According to the Bloomberg report, the Perplexity deal shows that SoftBank is “preparing to sharply accelerate its pace of AI investment,” as recently revealed by the company’s billionaire founder, Masayoshi Son.

“We’ve done many things, but all that’s been a warmup for my dream to realize artificial super-intelligence (ASI),” Son reportedly told investors at an annual shareholders meeting on June 21. “This is what I was born to do.”

Perplexity and SoftBank have not publicly commented on the deal. The Japanese technology company is planning to spend $100 billion to build artificial intelligence chips in a project dubbed ‘Izanagi,’ said the report. Earlier this year, SoftBank invested $200 million in Tempus AI, a medical-related startup.

Also read: French startup Mistral AI raises $650M to rival OpenAI

AI companies have attracted massive investments in recent months as investors bet on the technology as the next big thing. Earlier this month, French tech startup, Mistral AI, said it raised 600 million euros (~$650 million) in a funding round led by venture capital firm General Catalyst. And Anthropic AI, the creator of the Claude chatbot, has raised $7.3 billion.

Cryptopolitan Reporting by Jeffrey Gogo

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