Photo/Illutration SoftBank Corp. Executive Vice President Hiroyuki Terao, far left, and Perplexity AI CEO Aravind Srinivas, far right, announce their companies' partnership in Tokyo on June 17. (Takeshi Narabe)

Telecom giant SoftBank Corp. announced a partnership with the U.S. startup Perplexity AI on June 17 to bring its generative artificial intelligence-powered search engine to Japan.

While traditional search engines, such as Google, provide links to multiple pages of websites after a query, Perplexity's AI search service is formatted like a chat log.

Under the partnership, SoftBank will offer a one-year free subscription of Perplexity's premium plan—priced at 2,950 yen ($18.70) per month or 29,500 yen a year—to its mobile service subscribers, starting June 19.

"This will be a pioneering example of AI services," said Hiroyuki Terao, SoftBank executive vice president.

Perplexity was co-founded in 2022 by former Open AI engineer Aravind Srinivas, and has quickly grown into a unicorn startup with an estimated value of over $1 billion.

The company has attracted investments from notable figures such as Amazon.com Inc. founder Jeff Bezos and semiconductor giant Nvidia Corp.

Perplexity's platform allows users to select from various large language models (LLMs) including ChatGPT4.0 and displays sources of information.

It also offers features such as suggesting related questions and guiding users on how to refine their queries to obtain more accurate answers.

While the company does not disclose its user base, it claims to receive more than 230 million question inputs per month.

The majority of these come from the United States, but Perplexity is rapidly expanding worldwide, having partnered with major telecommunications providers such as Deutsche Telekom AG in Germany and SK Telecom Co. in South Korea.

The emergence of Perplexity and similar startups is putting pressure on Google to reconsider its approach.

The slang term “papuru”—or, “to Perplexity”— has already popped up online in Japan, potentially here to stay alongside the established verb “guguru,” or “to Google.”

Srinivas said AI search is constantly evolving, and that for large companies like Google, errors in search results can be catastrophic due to their massive user base.

He believes startups are not subject to such risks and predicts that his company will be bigger than Google in five years.

However, AI-powered search faces the challenge of how to display advertisements.

SoftBank, which owns the Yahoo! search engine, will also need to consider how to differentiate between the two services.

"This could be an opportunity to review Yahoo!'s search engine," said Terao.

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