Key takeaways

• Consumer AI application usage has stabilized, indicating a potential plateau in market growth.
• Revenue is seen as a more reliable metric than user numbers for evaluating tech companies.
• Perplexity’s ARR has doubled, showcasing strong user engagement and value creation.
• Human curiosity is crucial for maximizing AI’s potential and innovation.
• AI advancements are not fully utilized by consumers, suggesting a need for better education.
• Novelty in AI can boost awareness but may not sustain long-term user engagement.
• AI tools are increasingly used for work-related tasks, enhancing productivity.
• The gap between AI capabilities and consumer behavior is a barrier to growth.
• Apple’s acquisition of AI-focused companies like Perplexity could strengthen its product development.
• The AI industry needs to focus on educating users about current capabilities.
• AI accuracy is vital for effective information retrieval and search functions.
• The industry’s growth is hindered by consumer behavior not adapting to AI advancements.
• AI’s economic productivity relies on accurate and high-quality data sources.
• Novelty spikes in AI usage can lead to a reduction in sustained engagement.
• The potential of AI tools is constrained by the level of human curiosity and agency.

Guest intro

Dmitry Shevelenko is Chief Business Officer at Perplexity, where he leads all aspects of the company’s business growth and oversees the development of the AI answer engine built on real-time internet sources. Previously, he held senior roles in product and business development at Meta, LinkedIn, and Uber, where he led monetization strategies and partnership initiatives across consumer and enterprise markets. Shevelenko holds a BA in Anthropology from Columbia University and is a frequent speaker on AI innovation and business strategy at major industry conferences.

Why Apple should consider acquiring Perplexity

• Apple faces challenges in AI product development, making acquisitions strategic.

• I was obviously very vocal saying apple should buy perplexity… these guys actually know how to build ai products.

  — Dmitry Shevelenko

• Acquiring Perplexity could enhance Apple’s AI capabilities.
• The competitive landscape in AI requires strategic moves by major tech companies.
• Apple’s current challenges could be mitigated by integrating Perplexity’s expertise.
• Perplexity’s innovative approach aligns with Apple’s need for advanced AI solutions.
• Strategic acquisitions can position Apple as a leader in AI product development.
• The potential synergy between Apple and Perplexity could drive significant advancements.

The plateau in consumer AI application usage

• Consumer AI usage has flatlined over the past six months.

• When we look at the usage of consumer ai something very interesting has happened… there is sort of a a flattening that starts late twenty twenty five.

  — Dmitry Shevelenko

• This stabilization indicates a potential market stagnation.
• Understanding user trends is crucial for predicting future growth.
• The flattening suggests that consumer interest may be waning.
• Companies need to innovate to reignite consumer engagement.
• The plateau could reflect a saturation point in current AI offerings.
• Market strategies must adapt to this new phase of consumer AI usage.

Perplexity’s financial growth and user engagement

• Perplexity’s ARR has significantly increased, indicating strong user value.

• We started the year at under 250,000,000 arr and arifin recently shared that you know as of a month ago we crossed 500,000,000 arr and so clearly we’re creating value for our users.

  — Dmitry Shevelenko

• Financial milestones reflect the company’s performance and user engagement.
• ARR growth showcases Perplexity’s success in the competitive AI market.
• Strong user engagement is a key factor in Perplexity’s financial success.
• The increase in ARR highlights the company’s ability to create value.
• Perplexity’s growth is a testament to its effective business strategy.
• Understanding ARR is crucial for evaluating tech company success.

The role of AI in enhancing productivity

• Users leverage Perplexity for work-related tasks, driving adoption beyond consumer AI.

• People are actually using perplexity for work and knowledge related tasks… this was their secret weapon to be more productive.

  — Dmitry Shevelenko

• AI tools are integrated into professional workflows, boosting productivity.
• The practical applications of Perplexity enhance its role in productivity.
• Work-related use cases expand the reach of AI tools.
• Productivity gains are a significant advantage of AI adoption.
• AI’s integration into work tasks showcases its versatility and utility.
• Understanding how AI enhances productivity is vital for its adoption.

Revenue versus user metrics in tech evaluation

• Revenue is a more honest metric than MAUs for assessing value.

• I think revenue is a much more honest metric than than kind of you know top line maus which which I think you know can include in it a lot of hype and exploratory activity but aren’t as tightly coupled with value.

  — Dmitry Shevelenko

• Revenue provides a clearer picture of a company’s financial health.
• User metrics can be misleading due to hype and exploratory activity.
• Evaluating tech companies requires a focus on financial performance.
• Revenue reflects the actual value being delivered to users.
• Understanding the distinction between revenue and user metrics is crucial.
• Financial metrics offer a more reliable assessment of company success.

The disconnect between AI capabilities and consumer behavior

• Consumer behavior hasn’t fully adapted to AI capabilities, leading to growth flattening.

• I think there’s the we we some of the use cases got ahead of where where people were curious to explore like what is this ai thing but their behaviors didn’t change.

  — Dmitry Shevelenko

• The gap between AI tools and consumer adoption is a barrier to growth.
• Behavioral adaptation is necessary for realizing AI’s full potential.
• Companies must address the disconnect to drive AI adoption.
• Understanding consumer behavior is key to effective AI integration.
• The industry’s growth is hindered by this behavioral gap.
• Bridging the gap requires targeted education and innovation.

The capabilities overhang in the AI industry

• There is a capabilities overhang where advancements are not fully utilized by consumers.

• Part of what the broader industry needs to do is educate users on what is possible now… people are still using them in a very you know web one point o way.

  — Dmitry Shevelenko

• Educating users on AI capabilities is essential for adoption.
• The overhang highlights a significant barrier to consumer engagement.
• Advancements in AI require effective communication to users.
• The industry must focus on demonstrating AI’s potential.
• Understanding the capabilities overhang is crucial for strategic planning.
• Addressing this issue can unlock AI’s full potential for users.

Human curiosity as a constraint on AI potential

• The primary constraint on maximizing AI’s potential is human curiosity.

• The uniquely human ingredient to taking advantage of all this will be curiosity and agency.

  — Dmitry Shevelenko

• Curiosity drives innovation and effective use of AI technologies.
• Human agency is critical for leveraging AI advancements.
• Encouraging curiosity can enhance AI adoption and innovation.
• Understanding the role of curiosity is vital for maximizing AI’s potential.
• The constraint highlights the importance of human factors in technology adoption.
• Fostering curiosity can lead to more effective AI integration.

The impact of novelty on AI user engagement

• Novelty spikes in AI usage raise awareness but often reduce sustained engagement.

• I think the novelty spikes are great because it raises you know broad awareness and it brings you know it brings people in and then people have to you know discover their own kind of habitual use cases… you could see now it’s kind of you know that there’s been a reduction there too.

  — Dmitry Shevelenko

• Novelty can attract users but may not sustain long-term engagement.
• Awareness is crucial, but habitual use is necessary for retention.
• Understanding the impact of novelty is key to user engagement strategies.
• Sustained engagement requires more than initial interest.
• Companies must focus on creating lasting value beyond novelty.
• The transient nature of novelty highlights challenges in user retention.

The importance of accuracy in AI applications

• Accuracy in AI is essential for effective search and information retrieval.

• Ultimately like we see value in the most economically productive aspects of ai… you need to have best in class search so that whatever you’re doing with ai is grounded in the most up to date you know highest quality sources.

  — Dmitry Shevelenko

• Accurate data is critical for AI performance and user trust.
• Effective search functions rely on high-quality data sources.
• The value of AI is tied to its ability to provide accurate information.
• Understanding the importance of accuracy is crucial for AI development.
• Companies must prioritize data quality to enhance AI applications.
• Accuracy is a foundational element of successful AI integration.