Perplexity CEO on why the browser is AI's killer app

26:07Now, will it always like 100 % of the time work in a deterministic way? No. Are we going to get there in like a matter of months? I think so. You kind of have to be timing yourself where you're not exactly waiting for the moment where everything works reliably. You want to be a little early. You want to be a little edgy. I think there are some people who just love feeling the being part of the ride to like, you know, maybe there are more majority of the users are going to wait until everything works stable. So that's why we think the sidecar is already a value add for those kind of people where, OK, they don't have to use the agents that much.

26:44They can use a sidecar. They can use Gmail. They can use calendar connectors. They can use like all this LinkedIn search features, YouTube, or just basic stuff like searching over your own history. These are things that already work well. And this is already a massive value add over Chrome. And once they, like several minutes worth long horizon tasks start working reliably, that's going to make it feel more than just a browser. That's when you make it feel like an OS, like you want everything in that one container. and you'll feel like the rest of the computer doesn't even matter. We started this conversation talking about how you think the browser gives you this context to be able to create an actually useful agent.

27:23And there's this other technical path that the industry is looking at and getting excited about, which is MCP, Model Context Protocol. And at a high level, it's just this orchestration layer that lets an LLM talk to Airtable, Google Docs, whatever, and do things on your behalf in the same way that Comet is doing that in the sidebar. You're going at this problem through the browser and through the logged in state of the browser that you talked about and that shortcut. While a lot of people, Anthropic and others, OpenAI are looking at MCP as maybe the way that agents actually get built at scale.

27:56I'm curious what you think of those two paths and are you just very bearish on MCP or do you think MCP is for other kinds of companies? I'm not like extremely bearish on MCP. I just wanted to mature more. And I don't want to wait. I want to ship agents right now. I feel like AI as a community, as an industry, has just been talking about agents for like last two years and no one has actually shipped anything that worked. And I got tired of that. And like, we felt like the browser is a great way to do that today. MCP is going to definitely play a contributing factor to agents, like to the field, like in the next five years.

28:38There's still a lot of security issues they need to figure out there. Having your authentication tokens communicated from your client to an MCP server or from a remote MCP server to another client, all these things are pretty risky today. Way more risky than just having your persistent logins on your client on the browser. Same issues exist with the operator, which tried to create server-side versions of all your apps. This is OpenAI's computer use tool operator. Exactly. I think there's going to be some good MCP connectors that we'll definitely integrate with, like Linear or Notion. I guess GitHub has an MCP connector.

29:18So whenever it makes sense to use those over an agent that just opens these tabs and scrolls through them and clicks on things, we're going to use that. But it's always going to be bottlenecked by how well these servers are maintained and how you kind of like orchestrate these agents to use the protocol in the right way. It doesn't solve the search problem on those servers, by the way. You still have to go and figure out what data to retrieve. You define it as the orchestration layer. It's not the orchestration layer. It's just a protocol for communicating between servers and the client. or one server, another server.

29:59But it's still not solving the problem of the reasoning and knowing what information to extract and knowing what actions to take and all that chaining together different steps, trying things when things don't work. Whereas the browser is basically something that's been designed for humans to actually operate in. And extracting the DOM and knowing what actions to take seems to be something that these models, the reasoning models seem to be pretty good at. So we're going to do a hybrid approach and see what works best. At the end, it has to be fast, it has to be reliable, and it has to be cheap.

30:34So if MCP lets us do that better than the browsing agent, then we'll do that, right? Like there's no dogmatic vision here. At The Verge, we care a lot about the way our website looks and feels, the art of it, the visual experience. And with all this agent talk, and it collapsing into browsers. I'm curious what you think happens to the web and to websites that devote a lot to making their sites actually interesting to browse. Does the web just become a series of databases that agents are crawling through MCP or whatever and this entire economy of the web goes away? No. I actually think if you have a brand, people are going to be interested in knowing what that brand thinks.

31:22and it might go to you, the individual, or it might go to Verge, or it might go to both. Doesn't matter, right? So even within Verge, I might not be interested in articles written by some other people. I might be interested in specific people who have like their content or something. So I think the brand will play an even bigger role in a world where like both AIs and humans are surfing the web. And so I don't think it's going to go away. Maybe the traffic for you might not even come organically. it might come through social media. Like let's say you publish a new article. Some people might come click on it through Instagram or X or LinkedIn.

31:59Doesn't matter, right? And whether it'll be possible for a new platform to build traffic from scratch by just doing the good old SEO tricks, I'm actually bearish on that. It's going to be difficult to create your own presence by displaying the old playbook. You got to build your brand through a different manner. in this time period. And the existing ones who are lucky enough to already have a big brand presence, they have to maintain the brand also with a different playbook, not just doing SEO or traditional search engine growth tactics. We need to take another quick break. We'll be right back.

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35:16We're back.

35:20On Comet as a business, it's very compute intensive and it's still invite only. I imagine you wish you could just throw the gates open and let anyone use it, but it would melt your servers or your AWS bills, right? So how do you scale this thing? Not only do you scale it from the product sense and it becoming a thing that normal people can easily use and understand that curve of learning it that we talked about, but also just the business of it. you're not profitable, you're venture-backed, you have to make money one day, you have to be profitable. How do you scale something like this that is actually even more compute-intensive than a chatbot?

35:55I think if the reliability of these agents gets good enough, you could imagine people paying usage-based pricing. You might not be part of the max subscription tier of like$200 a month or anything, but there's like one task you really desperately want to get done, and you don't want to spend like three hours doing that. As long as the agent actually completes and you're like satisfied with the response rate, the success rate, you'll be okay with trusting the agent to like paying an advance fee of like$20. And for like, you know, for the recruiting task I described, like give me all the Stanford alumni who worked at Anthropic.

36:33I think that is a very interesting way of thinking about it, which is otherwise going to cost you a lot more time, or you have to like hire like a sourcing consultant or you have to hire a full-time sourcer whose only job is that if you value your time you're going to pay for it maybe like let me give you another example like you want to put an ad on meta right instagram and you kind of want to like look at ads done by similar brands pull that study that or like look at the adwords pricing of like you know 100 different keywords and figure out how to price your thing competitively like these are tasks that could definitely save you the hours and hours and maybe even give you an arbitrage over what you could do yourself because AI is able to do a lot more.

37:15At scale, if it helps you to make a few million bucks, does it not make sense to spend like$2 ,000 for that prompt? It does, right? I think we're going to be able to monetize in many more interesting ways than chatbots for the browser. It's still early, but the signs of life are already there in terms of what kind of use cases people have. And if you map reduce your cognitive labor in bulk to an AI that goes and does it reliably, it almost becomes like your personal AWS cluster with natural language described tasks. And I think we have to execute on it. But if we do execute on it and if the reasoning models are continuing to work well, you could imagine something that feels more like Claude Code for life.

38:05And Claude Code is a product that people are paying thousand bucks a month also, because even though it's expensive, it helps you maybe get a promotion faster because you're getting more work done and your salary goes up and it feels like the ROI is there. Are you betting so much on the browser for the next chapter of perplexity because the traditional chatbot race has just been completely won by ChatGPT? Like is perplexity as it exists today going away and the future of it is just comment? I wouldn't say that I'm betting on it because the chatbot race is over. Let me decouple the two things. The chatbot race does seem like it's over in the sense that it's very unlikely that people think of another product for day-to-day chat.

38:53From the beginning, we never competed on that market. We were always competing on search. We were trying to reimagine search. in the conversational style. Yes, every chatbot has search integrations. Some people like that. Some people still like a more search-like interface that we have. So we never wanted to go after that market and we're not competing there either. Google is trying to catch up and Grok's trying to catch up, Meta's trying to catch up. But I feel like all that is like wasted labor in my opinion at this point. The way I would phrase it is the browser is bigger than chat. It's a more sticky product.

39:29and it's the only way to build agents. It's the only way to build end-to-end workflows. It's the only way to build a true personalization, memory, and context. And so it's a bigger price, in my opinion, than trying to nail the chat game, especially in a market that's so fragmented. It's a much harder problem to crack too, both in terms of intelligence, how you package it, how you context engineer it, how you deal with all the shortcomings at the current moment, as well as like end user facing UX, which could be the front end, the back end, the security, privacy, and all the other bugs that you get to deal with when working with a much more multifaceted product like the browser.

40:10Do you think that's why OpenAI is going to be releasing a browser? Because they agree with that? I don't know if they are. I've read the same leaks that you have and it was very interesting. It came two hours after we launched. but uh i would say uh you you also made another point about perplexity being ignored and comet being the next thing i don't i don't see it that way because you cannot build a browser without a search a lot of people praise the comet browser because it doesn't feel like another browser because you know why one of the main reasons is of course we have the sidecar and we have the agent and all that, but the search, default search is perplexity.

40:51And we made it in a way where even if you're having an intent to navigate it, it'll understand that. It'll give you like four or five links if it feels like it's a navigational query. It'll give you images pretty quickly. It'll give you like a very short answer also. So you can combine informational queries or navigational queries, agent queries in like one single search box. That is only doable if you actually are working on the search problem, which we've been working on since the last two and a half years, right? So I don't see it as two separate things. Basically, you cannot build a product like Chrome without building Google.

41:25Similarly, you cannot build a product like Comet without building perplexity. So is there a Comet standalone mobile app and a standalone perplexity app? Yeah, there will be standalone apps for both. Some people are going to use the standalone Comet app, just like how they use Chrome or Safari, and it's okay. they probably won't do that because it's going to have an ai that you can talk to on every web page including in voice mode actually but you still want to just navigate and get to a website quickly like i just want to like go and browse verge without actually having any question in my mind that's fine and i could go to perplexity and have the all the other things the app has like discover feeds and spaces and like just just like quick fast answers without the web interface that's fine to.

42:12And we're going to support like a packaged version of the Browser Comet within the Perplexity app, just like how the Google app still supports navigation like Chrome. So by the way, both the Google app and the Chrome app are WebKit apps on iOS. Similarly, both the Google app and the Chrome app are Chromium apps on Android. We'll have to follow the same trajectory. Speaking of competition, I'm curious what you think of Dia, what the browser company has done. They released it around the same time as you. They're moving in this direction as well. Obviously, they're a smaller startup, but they got a lot of buzz with Arc, their original browser, and now seem to be betting on the same idea that you have with Comet.

42:53I'm curious if you've gotten to try it or how you think it will stack up against Comet. I haven't tried it myself. I've seen what other people have said. I think they have some interesting ideas on the visuals on the front end. If I were them, I would have just tried it in the same browser they had instead of going and trying to build distribution on a new one. But yeah, it's interesting. We're definitely going to study every product out there. And our focus, though, more goes on to Chrome. It is the big brother. And the way I think about it is even if I take 1 % of the Chrome users, set their default as Comet, that's a massive, massive win for us and a massive loss for them too, by the way, because any ad revenue lost is massive, like at that scale.

43:41Is word of mouth the main way you're going to grow Comet, or are you looking for distribution partnerships beyond that? In the beginning, we're going to do more word of mouth growth. It's very powerful. It's worked out well for us in the past with perplexity itself. And we're going to try to follow the same trajectory here. And luckily we have an installed base of perplexity already of like, you know, 30 to 40 million people. So even if we get a good chunk of those people to try out Comet and convert some of those people who tried it into setting it as default, it'll already be a massive victory without relying on any distribution partnerships.

44:16And then we're obviously going to try seeing how to convert that progress into a partnership like Google has with a bunch of people. I just want to caveat by saying it's going to be extremely hard. We've spoken about this in the past where Google makes sure every Android phone has Google Chrome as the default browser. And you cannot change that. You lose a lot of money if you change that. Microsoft makes sure every Windows laptop is coming with Edge as the default browser. Again, you cannot change that. You will lose a lot of money if you change that. Now, the next step is, okay, let them be the default browser.

44:52At least, can you have your app as part of the Android or Windows build? You still cannot change that easily, especially on Windows. It's basically pretty impossible to convince like large OEMs to change that. So they have all these agreements that are like several years locked in and you work with companies that plan for like the device that they're shipping two years in advance. That's their mode. And in some sense, it's not even the product. It's not even exactly in the distribution world. It's more in these legalities of how they crafted these agreements, which is That's why I'm like, like, you know, happy that the DOJ is at least looking into Google.

45:31And we've made a list of recommendations on that. And I hope some something happens there. Yeah, they may have forced a spinoff of Chrome, which would be really interesting and reset things. You know, there's a lot of people that think Apple should buy you. And Eddie Q, one of their top execs, actually has some pretty nice things to say about you on the stand when he was there during the Google trial and said that you guys had talked about working together. Obviously, you can't talk about something that hasn't been announced yet, especially with Apple. But what do you make of that and Apple? I mean, I'm firstly honored by Eddie mentioning us in the trial as a product that he likes.

46:05And he's heard from his circles that people like it. I would love to work with Apple on integrations with Safari or Siri or Apple Intelligence. It's the one product that almost everybody loves using. Or it's a status symbol. Like everybody wants to graduate using an Apple device. So I'm pretty sure that we share a lot of design aesthetics in terms of how we do things and how they do things. At the same time, my goal is to make Perplexity as big as possible. It's definitely possible that this browser is so platform agnostic that it can benefit Android and iOS ecosystems, Windows and Mac ecosystems.

46:46And we can be pretty big on our own, just like Google was. Of course, Google owns Android, but you could imagine they would have been pretty successful if they just had the best search engine and the best browser, and they didn't actually own the platform either. I and others also reported that Mark Zuckerberg approached you about potentially joining Meta and working on his reboot of their AI efforts. What was Zuck's pitch? I'm curious. Tell me. Zuck is awesome. He's doing a lot of awesome things. And I think Meta has such a sticky product. It's fantastic. And we look at that as an example of it's possible to build a large business without having any platform yourself.

47:26Were you shocked by the numbers that Zuck is paying for top AI research, these nine-figure compensation offers? I think a lot of them are actually tied to Meta's stock needing to increase for those numbers to be paid. So it's actually pretty contingent on the business and not just, you know, guaranteed payouts, but still huge numbers. Yeah, huge. And definitely I was surprised by the magnitude of the numbers. Seems like it's needed at this point for them. But at the same time, like Elon and XAI were shown, like, you know, you don't need to spend that much to train models competitive with OpenAI and Anthropic.

48:06So I don't know if money alone solves every problem here. You do need to have a team that works well together, has a proper mission alignment and milestones. In some sense, failure is not an option for them. The amount of investment is so big. And I feel like the way Zuck probably thinks is, you know, I'm going to get all the people, I'm going to get all the compute, and I'm going to get all the, like, you know, milestones set up for you guys. But now it's all on you to execute. And if you fail, like, it's going to look pretty bad on me. So you better not fail. That's probably the deal. What are the second order effects to the AI talent market, you think, after this, after Zuck's hiring spree?

48:48I mean, it's definitely going to feel like a transfer market now, right? Like with NBA or something. Yeah. There's going to be a few individual stars who are having so much leverage. One thing I've noticed is anthropic researchers are not the ones getting poached. Mostly. He has poached some, but not as many. Yeah, so it does feel like that's something labs need to work on, which is truly like aligning people on one mission, that like money alone is not the motivator for them. And as a company, your company is doing well, like, you know, the stock is going up and you feel dopamine from working there every day and you're encountering new kind of challenges.

49:29You feel a lot of growth. You're learning new things. And you're getting richer too along the way. like why would you want to go and just because you have some guaranteed payments do you think strongly about getting perplexity or profitability to be able to control your own destiny so to speak definitely it's inevitable we want to do it before the ipo and we think we can ipo in 2028 or 9. i would like to ipo by the way just to be clear i don't want to stay private forever like Some of the companies have chosen to do so. Even though it gives you advantages in M &As and decision-making power, I do think the publicity and the marketing you get from an IPO and the fact that people can finally invest in a search alternative to Google is a pretty massive opportunity for us to IPO.

50:16But I don't think it makes sense to IPO before hitting like a billion dollars in revenue and some profitability along the way. So that's definitely something we want to get to in the next four years or three years. But I don't want to like stunt our own growth and not be aggressive in trying new things today. Makes sense. Yeah. You launched Perplexity. It's crazy that it's already been just over three years now. And it was right around when ChatGPT first launched. And it's wild to think about everything we've talked about and that all this has happened in like barely three years. So maybe this is an impossible question, but I want to leave you with this question.

50:53If you look out three years from now, you just talked about the IPO, which is interesting. But what does perplexity look like three years from now? I hope it becomes the one tool you think of when you want to actually get anything done. And it has a lot of deep connection to you because it synchronizes with all your context and proactively things on your behalf and truly makes your life a lot easier. All right. We'll leave it there. Arvind, thanks. Thank you.

51:30Thanks to Aravind for taking the time to speak with me and thank you for tuning in. If you'd like to let us know what you thought about this episode or what else you'd like us to cover, drop us a line. You can email us at decoder at theverge.com. We're also on TikTok and Instagram via at decoder pod. If you like decoder, please share it with your friends and subscribe wherever you get your podcasts. And if you haven't already, don't forget to subscribe to The Verge, which gets you access to my newsletter command line and a bunch of other great stuff. Decoder is a production of The Verge and is part of the Vox Media Podcast Network.

52:03Our producers are Kate Cox and Nick Stat. Our editor is Ursa Wright. The Decoder music is by Breakmaster Cylinder. See you next time.

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