Perplexity AI Case Study: The New, Better Way of Search

People are going nuts for Perplexity AI and all the cool things it can do.

This is reflected in their annual revenue growth.

Image source: Originality

And the funding it got from the peak performers.

Image source: Originality

Started in August 2022, Perplexity AI became a unicorn in May 2024, receiving funding from the big dogs including, but not limited to:

• NVIDIA
• Jeff Bezos
• Andrej Karpathy
• Garry Tan
• Among others.

The use cases of Perplexity AI are pretty much endless.

Students and researchers are using it to crush their homework and projects.

Marketers are uncovering awesome insights to boost their campaigns.

Even programmers are turning to Perplexity for help with tricky coding problems.

So what exactly is Perplexity AI, and how does it stack up against other AI tools out there? I’m glad you asked!

In this ultimate case study, we’re going to dive deep into all things Perplexity:

• what makes it unique
• how you can start using it today
• and why it might just make you rethink everything you thought you knew about AI.

Let’s begin.

What is Perplexity AI?

Perplexity AI is an AI-powered search engine and research tool that provides conversational answers to your questions along with sources of those answers.

Think of it as ChatGPT or any other chat-based LLM but with constant access to the latest information on the web—so it does not hallucinate.

It can fetch info from across the web and break it down for you in a way that makes sense.

There’s more to it.

Answer this: can you use Claude or Mistral inside ChatGPT?

I’ll make it easy for you: you can’t.

However, you can use other LLMs inside Perplexity.

In their pro plan, Perplexity AI enables you to use State Of The Art (SOTA) Large Language Models (LLMs) like:

• GPT-4 Turbo
• Claude 3 Sonnet & Opus
• Mistral Large
• Default by Perplexity (optimized for fast search)
• And Sonar Large 32K (Trainer by Perplexity based on LLaMa 3 70B).

These bad boys can understand the context and meaning behind your queries, not just the words themselves.

So when you ask Perplexity a complex question, it doesn’t just spit out a crappy web search result.

It actually reads through relevant info, understands what you’re really asking, and gives you a clear, summarized answer – complete with citations to back it up.

That’s the beauty of Perplexity AI.

It combines the conversational interface of a chatbot with the vast knowledge retrieval power of a search engine.

With over $165 million in funding and a valuation north of $1 billion, they’re out to redefine how we access and discover knowledge online.

And I have a hunch: once you start using it, you’ll never want to go back to the old way of searching again.

How Does Perplexity AI Work?

You know how when you search on Google, it simply pulls up a list of web pages (aka 10 blue links) related to your keywords?

Well, Perplexity AI takes things to a whole new level.

It doesn’t just give you links; it actually reads through all that stuff and breaks it down into a clear, conversational answer.

Here’s how it goes down:

First, their super-smart natural language processing tech analyzes your query to deeply understand what you’re really asking, not just the words.

Then it hits the web, searching in real-time to find the most relevant and up-to-date info from legit sources like research papers, articles, forums, you name it.

But here’s the kicker: It doesn’t stop there.

Perplexity AI takes all those facts and insights, runs them through its fancy AI models (we’re talking big shots like GPT-4 and Claude), and weaves it all together into a clear, conversational answer.

Oh, and get this—it even gives you numbered citations linking back to the original sources it used.

You can easily double-check the facts or dive deeper into a specific topic.

You can keep firing follow-up questions, and it’ll remember the context, making the whole thing feel like a legitimate back-and-forth conversation.

And you can even tell it to focus on specific types of sources, like:

• the whole web
• academic sources
• Wolfram|Alpha
• Reddit
• And YouTube.

Finally, and this is the best feature: the Copilot mode.

If you search for any query with Copilot mode on, it will understand your question even better. And you get more nuanced answers with up to 25–30 sources (instead of 5-7 without copilot mode).

Most of the time, before answering directly, Perplexity will ask you a follow-up question to get ultra-specific (with Copilot mode on).

Two words for it: time-saving.

With that said, let’s get into the best Perplexity AI use cases.

Top Use Cases and Applications of Perplexity AI

While it may seem Perplexity’s only use case is a search engine, you will be surprised by all the things it can do for you when it comes to research and learning.

1. Education and learning

Beneficiaries: Students and teachers.

Let’s say you’re Sarah, and you’re stuck on photosynthesis for your biology class. You fire up Perplexity AI and ask, “Explain the process of photosynthesis in simple terms.”

Perplexity AI hits you with a clear, concise explanation along with hyper-relevant images and videos on the right:

You can keep going back and forth, asking for clarification or more examples until the lightbulb goes off.

But Perplexity AI isn’t just a student’s best friend; it’s also a game-changer for teachers like Mr. Johnson.

Let’s say he wants to create a killer lesson plan on photosynthesis.

He can ask Perplexity AI for a full outline complete with learning objectives, key concepts, suggested activities, and even ideas for assessments.

Perplexity AI will spit out a detailed outline tailored for a high school biology class, and Mr. Johnson can customize it however he wants.

He can even have Perplexity AI generate interactive quizzes and writing prompts on the topic to keep his students engaged.

And it’s not just science where Perplexity AI shines.

Need help breaking down a complex math problem step-by-step? Ask Perplexity.

Working on an English essay and need some fresh ideas or feedback? Perplexity’s got your back.

Studying for a history test and need some quick facts or different perspectives? You know who to call.

2. Content creation and ideation

Beneficiaries: Content creators and digital marketers.

Let’s start with content research and ideation.

Imagine you want to write about “10 Best AI Tools for Content Creators.”

Just feed that into Perplexity and boom, it’ll pull a list of relevant tools from various articles, each with a source link for fact-checking.

Instant goldmine of ideas to explore, write about, and back up.

Here’s another handy trick for outlining and summarizing content.

Let’s say you need to research and write about “How Perplexity AI Revolutionizes Content Creation. Provide a quick summary with all the essentials.”

Pop that into Perplexity and it’ll scan the web, pull relevant info from sources, and generate an AI-written outline or summary for you to work from.

And for the SEO folks, Perplexity is a must-have tool.

It analyzes search data to identify questions people are asking, keywords to target, and the latest industry trends—pure gold for optimizing content to rank higher and engage readers.

Ask it: “What are some frequently asked questions about using AI for content creation that I should cover?”

The best part?

Perplexity does all the heavy lifting:

• researching across sources
• generating content
• suggesting optimizations
• and providing relevant follow-up questions.

3. Research and information gathering

Beneficiaries: Researchers.

Imagine this: you’re a medical researcher studying the effects of a new drug on a specific condition.

Instead of spending hours (or days, or weeks) digging through endless research papers, you simply ask Perplexity AI:

“Hey, what are the latest clinical trial results for [drug name] in treating [condition]?”

Within seconds, Perplexity AI scours through all the relevant databases, academic journals, and reputable sources, and presents you with a concise summary of the key findings.

But that’s not all. With Perplexity AI, you get:

Improved accuracy: You can trust that the information you’re getting is legit. Perplexity AI only pulls data from reliable, high-quality sources, so you can say goodbye to questionable or outdated data.

Broader insights: By searching across a wide range of sources, Perplexity AI uncovers connections and data that you might have missed, giving you a more comprehensive understanding of your research topic.

Perplexity AI doesn’t just stop at searching for specific information. You can use it to stay up-to-date on the latest developments in your field.

Furthermore, If you have text or PDF documents you want to summarise and/or make sense of, Perplexity helps there too.

With the ability to attach documents, you can get hours of summarisation and understanding done in minutes, to say the least.

PRO TIP: And if you’re using Perplexity Pro, using LLMs like Claude 3 Opus or Sonnet gives you an unfair advantage through their extra-large context windows.

4. Balanced news perspectives

Beneficiaries: Balanced news seekers.

With so many different sources out there pushing their agendas, it’s tough to get the full picture on important issues.

With Perplexity, you can get an impartial overview of any topic under the sun.

Here’s how it works:

Let’s say there’s some major political controversy going on, like debates around universal basic income.

Instead of getting stuck reading one-sided arguments, just ask Perplexity AI something like “Pros and cons of universal basic income.”

In a snap, you’ll have a synthesized summary laying out the different perspectives in an easy-to-understand format, with a conclusive summary at the end.

Or maybe you’re a business analyst trying to understand how new environmental tax laws might impact the renewable energy industry.

Just query “Impact of environmental taxes on renewable energy industry” and Perplexity AI will gather crucial data from industry reports, academic studies, news articles – you name it.

Furthermore, Perplexity has its own latest/hot news section (they call it Discover) where you get the latest news in a distraction-free environment.

5. General Q&A and Fact-Checking

Beneficiaries: Fact-checkers, proofreaders, and all searchers.

If you are a regular searcher, like everyone else, Perpexity AI can help you there too.

Just like you would do a typical search with Google or Bing, you can make Perplexity AI your default search engine.

The best part?

You get that balanced overview way quicker than sifting through, for instance, Google results, yourself.

And since Perplexity shows its work by listing sources, you can easily verify the info or dig deeper if needed.

When it comes to fact-checking numbers, this prompt works wonder:

“Are these statements factually accurate and reliable? Fact-check each statement line by line and provide trusted sources and suggestions. Provide a source for each claim.

[enter statement(s) to fact-check]“

That’s just one example, but you get the idea. Perplexity does not hallucinate and if it does, it is way less than ChatGPT and Claude. Google’s Gemini has become much better.

Fact-checking is one of the best and the most reliable use case of Perplexity AI.

6. Programming and coding assistance

Beneficiaries: Programmers and coders (developers of all sorts).

Finally, Perplexity helps solve your programming problems too.

But let’s admit the harsh truth, it is not ideal for automating the complete coding process through prompt-to-code (like Github Copilot or ChatGPT’s code interpreter).

Perplexity is subpar at writing useful code. What it is great at is helping you find solutions to specific coding doubts you have.

Here’s how it might go down:

Let’s say you’re banging your head against the wall, trying to make sense of how to install Python on a Mac computer.

You need steps to follow and there needs to be handholding that needs to be done.

Ask Perpexity something like this: “I am a complete beginner to Python. Help me install it on my Macbook in an easy-to-follow steps.”

Not bad.

And if you wanna get really nasty, Perplexity even has this “Playground” feature where you can experiment with different AI models to generate code for you.

Perplexity AI vs. Other AI Search Engines and Chatbots

According to Originality, Perplexity AI is added under the “other” category of search engine which in sum only concludes to about 0.78% of the market share.

Guess what who leads the race?

Google, with a market share of 91.54% is still the most used search engine in the world.

Image source: Originality

But recently, Google faced a lot of backlash from almost everyone – searchers, SEOs, and everyone in between.

Source: Twitter (X)

Amid this heat, many found Perplexity to be “the man” who tolerated little to no BS and got straight to the point.

As per Similarweb, Perplexity AI had 61.5 million visits in March 2024. Not only that, Perplexity has millions of downloads for their Android and iOS apps.

Along with Perplexity AI, many other players have emerged in the AI search engine space – all with the same promise of a new, better way of searching the internet.

Some of the notable Perplexity AI alternatives include:

ChatGPT Plus: The premium plan of ChatGPT has access to information and all the plugins that make it super powerful and a potential substitute for Perplexity.

You.com: The closest competitor to Perplexity. Pretty much the same user interface and features (file attachment, SOTA LLMs, access to the internet, and clear sources for each answer).

Microsoft Copilot: Microsoft’s freemium web assistant does a decent job at searching the web with sources. Although it does not have specific search modes like Perplexity, the outputs it provides are of high quality in most cases.

Phind: Again, pretty much offers the same core features as You.com and Perplexity with a slightly cleaner interface. One unique feature includes the autodetection of whether search results are necessary for a query or generative AI without internet access would do the trick. Better for coding than Perplexity thanks to its dedicated code mode.

Last but not least, Google’s SGE (Search Generative Experience) is also a potential competitor to Perplexity. Although still in beta, Google now shows the AI-generated answer snippets for many queries.

It looks like this:

Google gives you the option to view the AI-powered answer or move ahead with the paid/organic search results.

It’s an in-built feature inside Google search, and not a separate product, at least as of now.

After using each one thoroughly, I settled with Perplexity.

I don’t know whether it is recency bias or not, but Perplexity, in my experience, is simply excellent, and it nails all the fundamental problems a searcher would face:

• ease of use.
• getting the right answers/sources fast.
• distraction-free environment (ad-free)
• and synced access everywhere.

What We Like About Perplexity AI

• Perplexity AI provides clear, instant, conversational answers instead of just lists of web pages like traditional search engines.
• It deeply understands queries and reads/synthesizes information from across the web in real time, pulling from legitimate, up-to-date sources that it cites.
• Unlike ChatGPT which can hallucinate, Perplexity doesn’t make up information – it uses credible sources.
• Perplexity gives you access to advanced AI models like Claude, GPT-4, and their own SOTA models for enriched answers.
• Clean interface, available everywhere (web, mobile apps, Copilot mode), streamlining how you discover and learn new information online efficiently.

What We Wish Perplexity AI Did Better

Let me start by saying that overall, Perplexity AI is mind-blowingly impressive tech.

But even the coolest, most hyped-up AI tools have room for improvement.

And if Perplexity truly wants to stand out and become the go-to AI companion, here are some key areas they should focus on:

• Code Generation Capabilities. While Perplexity can explain coding concepts decently, its actual ability to generate usable code is lackluster.
• Smarter File Summarization. It’s great that Perplexity allows file/doc uploads for analysis. But what would be ideal is the ability to set summarization preferences upfront.
• More Source Customization. Currently, there’s no easy way to filter or prioritize sources (other than the Focus Search) when searching on Perplexity. I can’t just tell it “prioritize industry reports over blogs”, for example. I would love that.
• Referral program. Perplexity AI’s referral program may look shiny on the outside with a $10 discount on Perplexity Pro for every referral. But trust me it is not. Let’s say you refer 10 individuals. It means you have $100 worth of discount. Now, it is not an accumulative discount, meaning you can only use $10 per billed month/year. You cannot use the whole damn thing at a time. It bothers me a ton.

These were some of the things I believe where Perplexity should shed some light.

All in all, the pros outweigh the cons and the difference is not even close. Overall, pretty impressive product.

The Future of Perplexity AI and AI Search

I don’t think Google is going anywhere.

At the end of the day, it will come down to an individual’s preference.

Many would still prefer to go to Google, search for a query, and read content from the top results or the specific websites they trust.

While many would prefer something like Perplexity, where you get a quick answer without visiting any website. And then you can decide whether you want to visit a source to get more information.

But one thing is clear. Perplexity AI is changing the rules of the game.

With their AI models ingesting and understanding information in real-time, they’re giving us the goods – clear, relevant answers from trusted sources.

And with all that investor cash pouring in, you can bet they’ll keep innovating.

Hell, I won’t be surprised if Perplexity becomes a verb in a few years. “Just Perplexity it!”