Perplexity Voted The No. 1 “Most Likely To Fail” Startup At A Major Tech Summit

The Cerebral Valley AI Conference in San Francisco is an event that brings people across the AI industry together to discuss innovations, industry insights and news.

But this year, as reported by Business Insider, Perplexity AI was voted the ‘most likely to fail’ billion-dollar AI company.

The verdict came from a vote placed by 300 founders, investors and researchers at the event in San Francisco.

The outcome has quickly become a talking point across Silicon Valley, as it raises important questions not just about Perplexity, but about the state of the AI industry and crucially, whether there really is an AI bubble waiting to pop.

Who Is Perplexity AI?

Founded by former OpenAI researcher Aravind Srinivas in 2022, Perplexity is a conversational AI company, that is designed to replace traditional search engines.

The company uses AI to find information from the web and synthesise it into information designed to answer the asker’s query. In short, it’s a clearer, more in-depth alternative to something like Google Search.

Perplexity has also raised multiple rounds from investors, recently seeing its valuation jump to as high as $50 billion. (Business Insider)

And whilst many have praised its quick rise, others have been quick to warn about how it may be a sign that the AI bubble is growing ever-closer to bursting.

Why Did The Industry Vote Perplexity “Most Likely To Fail”?

The poll was an interesting (and controversial one). It wasn’t asking which company had the best or worst product, but simply which one was most likely to fail.

Many believe that Perplexity’s ambition to dethrone Google as the world’s search engine is just too ambitious. With years of brand-building, ad dominance and becoming so embedded in user behaviour, trying to compete is a big task.

And when it comes to investor confidence, many have commented that Perplexity’s value is driven more by hype than actual success.

Perplexity’s Response

Replying in an email to Business Insider, Perplexity spokesman Jesse Dwyer commented “Geeze, it sounds more like the judgmental valley conference.”

And she’s right. Perplexity has built itself quickly, securing partnerships with companies like Snapchat and Airtel. It’s certainly not just driven by hype, but genuinely is an impressive business. In fact, Sacra estimates that Perplexity hit $148M in annual revenue in June 2025, up from $63M at the end of 2024…that doesn’t sound like just hype to us.

OpenAI Came Second

When it came to second place in the votes for companies most likely to fail, OpenAI ranked second. Whilst many might be surprised to hear of this, OpenAI has been criticised recently for its high energy operating costs, it’s extremely high valuation and its sustainability credentials.

The vote further emphasises fears of an AI bubble. If we are in one, then it’s true that not all AI companies will survive its burst. Those driven by hype alone, causing them to be overvalued, will likely fall to the wayside. Whether we are in one? Well, that remains to be seen.

Scott Dawson, CEO of DECTA UK commented “What needs to be filtered out isn’t just companies built on faulty premises, but the breathless hype that has made what should be a revolutionary but ultimately everyday technology into a near-religious mania. When that happens, we can hopefully start building upon the AI tools that are already proving themselves to be genuinely useful.”

What Next For Perplexity?

Being named ‘most likely to fail’ doesn’t mean that it will. In fact, Perplexity has grown massively in recent years, driving real investor confidence, partnerships and a genuinely good product.

But it also clearly has a lot to prove, especially when it comes to taking on a tech giant like Google.

And with growing fears of an AI bubble, is Silicon Valley just looking to see which companies will be first in the firing line? or is it just cautious pessimism? Only time will tell.