In the generative AI space, primarily dominated by tech developers like OpenAI, Microsoft and Google, Perplexity.ai seeks distinction. E&P spoke with the company’s chief business officer, Dmitry Shevelenko, in late July, a day after the company revealed its new Perplexity Publishers Program.
“The best way to think about Perplexity is that we are an answer machine — this marriage of a search engine using Large Language Models AI to synthesize a variety of sources’ real-time information, to give users a concise answer to their specific question,” Shevelenko said.
“A big difference between us and OpenAI is that we don’t train our own foundational model. … We don’t scrape the internet and then train AI on it. We have a web index that includes news articles, and we only use that,” he explained.
While other generative AI technologies resist source transparency, it appears Perplexity is leaning into it.
“The thing that Perplexity pioneered and was always core to our product was the prominence of sources,” he said. “We actually always list sources above answers. In a kind of journalist’s parlance, we think your article is only as good as your sources, and that’s equally true of an AI-generated answer.
“Furthermore, it’s not just listing the sources at the top, but actually having inline citation, so you see, sentence by sentence, where the information’s coming from. Attribution is not only fair and good business practice; it’s important to the user because that's how a user determines how much weight to put in the answer. If you don’t know the sources or have never heard of them, you’ll be more skeptical than if it’s a reputable publisher,” he suggested.
Perplexity has not been exempted from publishers’ criticism and threat of legal action. It has taken incoming fire from two prominent publishing brands, Forbes Media and Condé Nast, which sent the developer a cease-and-desist demand.
In June, Forbes accused Perplexity of republishing its reporting “almost verbatim” without attribution. E&P published a subsequent Q&A with Forbes Media’s chief of content and Forbes Magazine Editor-in-Chief Randall Lane, in which he further explained the allegations and pondered generative AI’s perils and opportunities.
Shevelenko responded to the allegations, “Prior to their article — like 10 days before that, we launched an experimental new feature in Perplexity, called Perplexity Pages, a more stylized version of an answer. It had a different user interface. This was a prototype. Our main product answers questions. It was a way for people to create more of a collection of different answers and have it feel like a website. A page that was created was based on reporting from Forbes and others about Eric Schmidt’s drones. Within 24 hours of the initial criticism, we actually updated the user interface to make sources more prominent on the page, as they are in any other answer from Perplexity.
“We also, within a week, changed the system prompt for the text generation of Pages, so if it does use a single source heavily as input, it will in the article — in the text itself — say, ‘As reported by Forbes’ and adhere to that best practice. But it is inaccurate to say it was a verbatim lifting of any language. It was different language, a synthesis of their reporting and others’ reporting on the topic. … There’s no merit to the claim that this is plagiarism or somehow anything greater than an accepted fair use of facts.”
Ultimately, Perplexity removed the disputed article from its site.
Before Randall Lane’s Forbes June 2024 column, Perplexity extended an offer to Forbes to join their then-forthcoming Publishers Program.
A Forbes spokesperson said in a statement to E&P: “Perplexity came to Forbes with a proposal several months ago, and we chose to decline because it significantly undervalued both our journalism and the Forbes brand. It’s critical for AI companies to create fair deals that respect and recognize the time and resources it takes to create impactful journalism.”
The appeal to news publishers
Shevelenko said the Perplexity Publisher Program’s origin story began in January, “well before any of the criticism.” He said their management team keenly recognized that news media publishing was in peril and that without a healthy, sustainable publishing and journalism ecosystem, their solution would wither.
That is an unexpected tone from a tech developer.
“This program is not a legal strategy. It is not a PR strategy. It was born from a conviction that creating a deep alignment with publishers is important for our long-term success,” he said.
Shevelenko disclosed that the company had planned the launch for June, but the criticism from Forbes and Condé Nast caused them to pump the brakes.
As program partners, news publishers will have access to Perplexity’s APIs, allowing them to integrate question-and-answer functionality natively on their sites and produce responses to users’ questions based exclusively on their own reporting.
But the most intriguing part of the program is revenue sharing.
“It’s a very simple model,” he explained. “The atomic unit of revenue sharing is an article used as a source to generate an answer. … If on that page view we generate any kind of revenue, whether it be our sponsored questions, an ad unit, a video ad unit — and regardless of how anyone engages with that ad unit — if we make money, the publisher gets a flat percentage.”
Though he didn’t cite a specific rate, he said it’s a “double-digit” percentage.
Shevelenko spoke frankly about Perplexity’s investors’ trepidation about revenue sharing. Obviously, they’d prefer a more favorable profit margin, so the timing of the program — before ads are sold and the solution is monetized — was critical. In other words, it would’ve been more difficult to “sell” them on the revenue share model once investors became accustomed to pure profit.
Another distinction between the Perplexity program and OpenAI’s licensing agreements is the publishers themselves.
“They’re paying the biggest publishers what seems like handsome sums, but as one-time deals. And they’re assuming that smaller and medium-sized publishers don't have the legal resources to sue them. What we’ve done is create a program for everyone,” he said. Asked for clarification on that, Shevelenko said they welcome all news publishers to join their program, including digital outlets, independents, nonprofits and community/hyperlocal publishers.
With the launch announcement came a list of publishers who have signed on to the program: TIME, Der Spiegel, Fortune, Entrepreneur, The Texas Tribune and WordPress.com. By late August, Perplexity expects to announce more domestic and international publishers.
Despite their extended handshake to publishers, Shevelenko said he anticipates cynicism.
“I understand why publishers are skeptical. They’ve been dealt a raw hand from tech platforms in the past, so their skepticism is merited, and it’s on us to prove that we’re a good-faith actor,” he told E&P.
Gretchen A. Peck is a contributing editor to Editor & Publisher. She's reported for E&P since 2010 and welcomes comments at gretchenapeck@gmail.com.
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