Perplexity acquires RAG technology startup Carbon

Artificial intelligence search startup Perplexity has acquired Carbon, a Seattle-based startup specializing in retrieval-augmented generation (RAG) technology, marking a strategic expansion in enterprise search capabilities.

Strategic acquisition details: Perplexity’s purchase of Carbon, announced in December 2024, represents a calculated move to enhance its AI-powered search capabilities and enterprise offerings.

• The acquisition brings on board Carbon’s four-person team, including founders Derek Tu and Aditya Chempakasseril, who bring extensive product and technical expertise
• Carbon previously raised $1.3 million in seed funding from investors including Treble and MKT1
• The deal follows Perplexity’s recent $500 million funding round, which valued the company at $9 billion

Technical capabilities and integration: RAG technology allows AI systems to access and process information from various external data sources, significantly expanding search functionality.

• The technology enables integration with platforms like Google Drive, SharePoint, Notion, and Slack
• Perplexity plans to launch enhanced search features in early 2025, allowing users to search across personal and professional files
• The integration aims to create a more comprehensive and personalized search experience by connecting multiple data sources

Market positioning and competition: The enterprise search market is becoming increasingly competitive as major tech companies develop similar capabilities.

• OpenAI, Google, and Microsoft are all working on comparable technologies
• Perplexity’s valuation has grown dramatically from $520 million to $9 billion in one year
• The acquisition strengthens Perplexity’s position against established players in the AI search space

Implementation timeline and features: The company has outlined a clear roadmap for integrating Carbon’s technology into its platform.

• Early 2025 will see the launch of enhanced search capabilities
• Users will be able to search across multiple platforms simultaneously
• The system will provide more contextual and personalized search experiences by combining web-based information with personal and organizational data

Looking ahead: Transformative potential: The integration of Carbon’s RAG technology into Perplexity’s platform could fundamentally change how users interact with digital information, though success will depend on effective implementation and user adoption rates.

• The ability to seamlessly search across multiple data sources could address long-standing challenges in information retrieval
• The technology’s effectiveness in enterprise settings will be a crucial test of its practical value
• Questions remain about data privacy, security, and the scalability of the integrated platform